Correlation Between RYU Apparel and G III

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

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

Diversification Opportunities for RYU Apparel and G III

-0.48

Correlation Coefficient

RYU Apparel  G III

Very good diversification

The 3 months correlation between RYU and GIII is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding RYU Apparel 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 RYU Apparel 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 RYU Apparel 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 RYU Apparel i.e., RYU Apparel and G III go up and down completely randomly.

Pair Corralation between RYU Apparel and G III

Assuming the 90 days horizon RYU Apparel is expected to under-perform the G III. In addition to that, RYU Apparel is 6.21 times more volatile than G III Apparel Group. It trades about -0.01 of its total potential returns per unit of risk. G III Apparel Group is currently generating about 0.06 per unit of volatility. 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

RYU Apparel  vs.  G III Apparel Group

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.

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.

Pair Trading with RYU Apparel and G III

The main advantage of trading using opposite RYU Apparel and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RYU Apparel 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 RYU Apparel 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.