Correlation Between Trade Desk and G-III Apparel

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

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

Diversification Opportunities for Trade Desk and G-III Apparel

0.93

Correlation Coefficient

Trade Desk  G-III Apparel

Almost no diversification

The 3 months correlation between Trade and G-III is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding The Trade Desk 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 Trade Desk 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 The Trade Desk are associated (or correlated) with G-III Apparel. 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 Trade Desk i.e., Trade Desk and G-III Apparel go up and down completely randomly.

Pair Corralation between Trade Desk and G-III Apparel

Assuming the 90 days trading horizon The Trade Desk is expected to under-perform the G-III Apparel. In addition to that, Trade Desk is 2.44 times more volatile than G III Apparel Group. It trades about -0.21 of its total potential returns per unit of risk. G III Apparel Group is currently generating about -0.15 per unit of volatility. If you would invest  3,100  in G III Apparel Group on December 29, 2024 and sell it today you would lose (580.00) from holding G III Apparel Group or give up 18.71% of portfolio value over 90 days.

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

The Trade Desk  vs.  G III Apparel Group

Trade Desk

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Trade Desk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Trade Desk and G-III Apparel

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

The idea behind The Trade Desk 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.