Correlation Between Lakeland Industries and G III

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

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

Diversification Opportunities for Lakeland Industries and G III

0.09

Correlation Coefficient

Lakeland Industries  G III

Significant diversification

The 3 months correlation between Lakeland and GIII is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lakeland Industries 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 Lakeland Industries 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 Lakeland Industries 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 Lakeland Industries i.e., Lakeland Industries and G III go up and down completely randomly.

Pair Corralation between Lakeland Industries and G III

Given the investment horizon of 90 days Lakeland Industries is expected to generate 1.12 times more return on investment than G III. However, Lakeland Industries is 1.12 times more volatile than G III Apparel Group. It trades about 0.03 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  2,261  in Lakeland Industries on November 28, 2024 and sell it today you would earn a total of  44.00  from holding Lakeland Industries or generate 1.95% return on investment over 90 days.

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

Lakeland Industries  vs.  G III Apparel Group

Lakeland Industries

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lakeland Industries are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, Lakeland Industries is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 Lakeland Industries and G III

The main advantage of trading using opposite Lakeland Industries and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakeland Industries 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 Lakeland Industries 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.

Check out your portfolio center.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.