Correlation Between G III and Oxford Industries

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

Diversification Opportunities for G III and Oxford Industries

0.91

Correlation Coefficient

G III  Oxford Industries

Almost no diversification

The 3 months correlation between GIII and Oxford is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Oxford Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Industries 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 Oxford Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Industries has no effect on the direction of G III i.e., G III and Oxford Industries go up and down completely randomly.

Pair Corralation between G III and Oxford Industries

Given the investment horizon of 90 days G III Apparel Group is expected to generate 0.8 times more return on investment than Oxford Industries. However, G III Apparel Group is 1.24 times less risky than Oxford Industries. It trades about -0.12 of its potential returns per unit of risk. Oxford Industries is currently generating about -0.1 per unit of risk. If you would invest  3,247  in G III Apparel Group on December 28, 2024 and sell it today you would lose (513.00) from holding G III Apparel Group or give up 15.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

G III Apparel Group  vs.  Oxford Industries

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.

Oxford Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oxford Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with G III and Oxford Industries

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

The idea behind G III Apparel Group and Oxford Industries 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..