Correlation Between G III and RYU Apparel

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

Diversification Opportunities for G III and RYU Apparel

-0.48

Correlation Coefficient

G III  RYU Apparel

Very good diversification

The 3 months correlation between GIII and RYU is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and RYU Apparel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RYU Apparel 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 RYU Apparel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RYU Apparel has no effect on the direction of G III i.e., G III and RYU Apparel go up and down completely randomly.

Pair Corralation between G III and RYU Apparel

Given the investment horizon of 90 days G III Apparel Group is expected to generate 0.16 times more return on investment than RYU Apparel. However, G III Apparel Group is 6.21 times less risky than RYU Apparel. It trades about 0.06 of its potential returns per unit of risk. RYU Apparel is currently generating about -0.01 per unit of risk. If you would invest  1,558  in G III Apparel Group on October 11, 2024 and sell it today you would earn a total of  1,662  from holding G III Apparel Group or generate 106.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	11.11%
Values	Daily Returns

G III Apparel Group  vs.  RYU Apparel

G III Apparel

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in G III Apparel Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward indicators, G III may actually be approaching a critical reversion point that can send shares even higher in February 2025.

RYU Apparel

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with G III and RYU Apparel

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

The idea behind G III Apparel Group and RYU Apparel 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.