Correlation Between Ermenegildo Zegna and G III

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

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

Diversification Opportunities for Ermenegildo Zegna and G III

0.09

Correlation Coefficient

Ermenegildo Zegna  G III

Significant diversification

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

Pair Corralation between Ermenegildo Zegna and G III

Considering the 90-day investment horizon Ermenegildo Zegna NV is expected to generate 0.91 times more return on investment than G III. However, Ermenegildo Zegna NV is 1.1 times less risky than G III. It trades about -0.2 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.36 per unit of risk. If you would invest  952.00  in Ermenegildo Zegna NV on November 28, 2024 and sell it today you would lose (87.00) from holding Ermenegildo Zegna NV or give up 9.14% of portfolio value over 90 days.

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

Ermenegildo Zegna NV  vs.  G III Apparel Group

Ermenegildo Zegna

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ermenegildo Zegna NV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Ermenegildo Zegna may actually be approaching a critical reversion point that can send shares even higher in March 2025.

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 unfluctuating performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Ermenegildo Zegna and G III

The main advantage of trading using opposite Ermenegildo Zegna and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ermenegildo Zegna 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 Ermenegildo Zegna NV 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.