Correlation Between G III and Vince Holding

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

Diversification Opportunities for G III and Vince Holding

0.12

Correlation Coefficient

G III  Vince Holding

Average diversification

The 3 months correlation between GIII and Vince is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Vince Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vince Holding Corp 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 Vince Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vince Holding Corp has no effect on the direction of G III i.e., G III and Vince Holding go up and down completely randomly.

Pair Corralation between G III and Vince Holding

Given the investment horizon of 90 days G III Apparel Group is expected to generate 0.53 times more return on investment than Vince Holding. However, G III Apparel Group is 1.88 times less risky than Vince Holding. It trades about -0.29 of its potential returns per unit of risk. Vince Holding Corp is currently generating about -0.28 per unit of risk. If you would invest  3,218  in G III Apparel Group on November 28, 2024 and sell it today you would lose (416.00) from holding G III Apparel Group or give up 12.93% of portfolio value over 90 days.

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

G III Apparel Group  vs.  Vince Holding Corp

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 fairly strong forward indicators, G III is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Vince Holding Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vince Holding Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Vince Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G III and Vince Holding

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

The idea behind G III Apparel Group and Vince Holding Corp 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.