Correlation Between Jerash Holdings and G III

Can any of the company-specific risk be diversified away by investing in both Jerash Holdings and G III 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 Jerash Holdings and G III into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jerash Holdings and G III Apparel Group, you can compare the effects of market volatilities on Jerash Holdings and G III 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 Jerash Holdings with a short position of G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jerash Holdings and G III.

Diversification Opportunities for Jerash Holdings and G III

-0.35

Correlation Coefficient

Jerash Holdings  G III

Very good diversification

The 3 months correlation between Jerash and GIII is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Jerash Holdings and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel and Jerash Holdings 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 Jerash Holdings are associated (or correlated) with G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of Jerash Holdings i.e., Jerash Holdings and G III go up and down completely randomly.

Pair Corralation between Jerash Holdings and G III

Given the investment horizon of 90 days Jerash Holdings is expected to generate 0.7 times more return on investment than G III. However, Jerash Holdings is 1.42 times less risky than G III. It trades about 0.08 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.03 per unit of risk. If you would invest  337.00  in Jerash Holdings on November 28, 2024 and sell it today you would earn a total of  25.00  from holding Jerash Holdings or generate 7.42% return on investment over 90 days.

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

Jerash Holdings  vs.  G III Apparel Group

Jerash Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jerash Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Jerash Holdings may actually be approaching a critical reversion point that can send shares even higher in March 2025.

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.

Pair Trading with Jerash Holdings and G III

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

The idea behind Jerash Holdings and G III Apparel Group 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.