Correlation Between G III and Waste Connections

Can any of the company-specific risk be diversified away by investing in both G III and Waste Connections at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining G III and Waste Connections into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G III Apparel Group and Waste Connections, you can compare the effects of market volatilities on G III and Waste Connections and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in G III with a short position of Waste Connections. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and Waste Connections.

Diversification Opportunities for G III and Waste Connections

-0.63

Correlation Coefficient

G III  Waste Connections

Excellent diversification

The 3 months correlation between GI4 and Waste is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Waste Connections in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Connections and G III is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on G III Apparel Group are associated (or correlated) with Waste Connections. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Connections has no effect on the direction of G III i.e., G III and Waste Connections go up and down completely randomly.

Pair Corralation between G III and Waste Connections

Assuming the 90 days trading horizon G III Apparel Group is expected to under-perform the Waste Connections. In addition to that, G III is 2.18 times more volatile than Waste Connections. It trades about -0.24 of its total potential returns per unit of risk. Waste Connections is currently generating about 0.19 per unit of volatility. If you would invest  16,697  in Waste Connections on December 2, 2024 and sell it today you would earn a total of  1,303  from holding Waste Connections or generate 7.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

G III Apparel Group  vs.  Waste Connections

G III Apparel

Risk-Adjusted Performance

Very Weak

Over the last 90 days G III Apparel Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Waste Connections

Risk-Adjusted Performance

Very Weak

Over the last 90 days Waste Connections has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Waste Connections is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with G III and Waste Connections

The main advantage of trading using opposite G III and Waste Connections positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, Waste Connections can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Waste Connections will offset losses from the drop in Waste Connections' long position.

The idea behind G III Apparel Group and Waste Connections pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.