Correlation Between G III and Moncler SpA

Can any of the company-specific risk be diversified away by investing in both G III and Moncler SpA 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 Moncler SpA 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 Moncler SpA, you can compare the effects of market volatilities on G III and Moncler SpA 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 Moncler SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and Moncler SpA.

Diversification Opportunities for G III and Moncler SpA

-0.81

Correlation Coefficient

G III  Moncler SpA

Pay attention - limited upside

The 3 months correlation between GIII and Moncler is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Moncler SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moncler SpA 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 Moncler SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moncler SpA has no effect on the direction of G III i.e., G III and Moncler SpA go up and down completely randomly.

Pair Corralation between G III and Moncler SpA

Given the investment horizon of 90 days G III Apparel Group is expected to under-perform the Moncler SpA. In addition to that, G III is 1.09 times more volatile than Moncler SpA. It trades about -0.12 of its total potential returns per unit of risk. Moncler SpA is currently generating about 0.15 per unit of volatility. If you would invest  5,539  in Moncler SpA on December 28, 2024 and sell it today you would earn a total of  1,033  from holding Moncler SpA or generate 18.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

G III Apparel Group  vs.  Moncler SpA

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. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Moncler SpA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Moncler SpA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Moncler SpA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G III and Moncler SpA

The main advantage of trading using opposite G III and Moncler SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, Moncler SpA 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 Moncler SpA will offset losses from the drop in Moncler SpA's long position.

The idea behind G III Apparel Group and Moncler SpA 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.