Correlation Between Triumph Apparel and Gildan Activewear

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

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

Diversification Opportunities for Triumph Apparel and Gildan Activewear

0.0

Correlation Coefficient

Triumph Apparel  Gildan Activewear

Pay attention - limited upside

The 3 months correlation between Triumph and Gildan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Triumph Apparel and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear and Triumph 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 Triumph Apparel are associated (or correlated) with Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of Triumph Apparel i.e., Triumph Apparel and Gildan Activewear go up and down completely randomly.

Pair Corralation between Triumph Apparel and Gildan Activewear

If you would invest  2,963  in Gildan Activewear on October 11, 2024 and sell it today you would earn a total of  1,735  from holding Gildan Activewear or generate 58.56% return on investment over 90 days.

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

Triumph Apparel  vs.  Gildan Activewear

Triumph Apparel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Triumph Apparel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Triumph Apparel is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Gildan Activewear

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gildan Activewear has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Gildan Activewear is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Triumph Apparel and Gildan Activewear

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

The idea behind Triumph Apparel and Gildan Activewear 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.