Correlation Between VF and G-III Apparel

Can any of the company-specific risk be diversified away by investing in both VF 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 VF 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 VF Corporation and G III Apparel Group, you can compare the effects of market volatilities on VF 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 VF with a short position of G-III Apparel. Check out your portfolio center. Please also check ongoing floating volatility patterns of VF and G-III Apparel.

Diversification Opportunities for VF and G-III Apparel

-0.09

Correlation Coefficient

VF  G-III Apparel

Good diversification

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

Pair Corralation between VF and G-III Apparel

Assuming the 90 days horizon VF Corporation is expected to generate 1.08 times more return on investment than G-III Apparel. However, VF is 1.08 times more volatile than G III Apparel Group. It trades about 0.12 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.06 per unit of risk. If you would invest  1,968  in VF Corporation on December 2, 2024 and sell it today you would earn a total of  365.00  from holding VF Corporation or generate 18.55% return on investment over 90 days.

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

VF Corp.  vs.  G III Apparel Group

VF Corporation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VF Corporation are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, VF reported solid returns over the last few months and may actually be approaching a breakup point.

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 latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with VF and G-III Apparel

The main advantage of trading using opposite VF and G-III Apparel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VF 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 VF Corporation 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.