Correlation Between GOLD ROAD and G III

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

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

Diversification Opportunities for GOLD ROAD and G III

0.72

Correlation Coefficient

GOLD ROAD  G III

Poor diversification

The 3 months correlation between GOLD and GI4 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES 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 GOLD ROAD 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 GOLD ROAD RES 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 GOLD ROAD i.e., GOLD ROAD and G III go up and down completely randomly.

Pair Corralation between GOLD ROAD and G III

Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 0.9 times more return on investment than G III. However, GOLD ROAD RES is 1.11 times less risky than G III. It trades about 0.13 of its potential returns per unit of risk. G III Apparel Group is currently generating about 0.08 per unit of risk. If you would invest  100.00  in GOLD ROAD RES on September 23, 2024 and sell it today you would earn a total of  21.00  from holding GOLD ROAD RES or generate 21.0% return on investment over 90 days.

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

GOLD ROAD RES  vs.  G III Apparel Group

GOLD ROAD RES

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GOLD ROAD RES are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, GOLD ROAD exhibited solid returns over the last few months and may actually be approaching a breakup point.

G III Apparel

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in G III Apparel Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, G III unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GOLD ROAD and G III

The main advantage of trading using opposite GOLD ROAD and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD 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 GOLD ROAD RES 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 Stocks Directory module to find actively traded stocks across global markets.