Correlation Between G III and BANKINTER ADR

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

By analyzing existing cross correlation between G III Apparel Group and BANKINTER ADR 2007, you can compare the effects of market volatilities on G III and BANKINTER ADR 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 G III with a short position of BANKINTER ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and BANKINTER ADR.

Diversification Opportunities for G III and BANKINTER ADR

0.02

Correlation Coefficient

G III  BANKINTER ADR

Significant diversification

The 3 months correlation between GI4 and BANKINTER is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and BANKINTER ADR 2007 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANKINTER ADR 2007 and G III 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 G III Apparel Group are associated (or correlated) with BANKINTER ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANKINTER ADR 2007 has no effect on the direction of G III i.e., G III and BANKINTER ADR go up and down completely randomly.

Pair Corralation between G III and BANKINTER ADR

Assuming the 90 days trading horizon G III Apparel Group is expected to generate 1.23 times more return on investment than BANKINTER ADR. However, G III is 1.23 times more volatile than BANKINTER ADR 2007. It trades about 0.08 of its potential returns per unit of risk. BANKINTER ADR 2007 is currently generating about 0.04 per unit of risk. If you would invest  2,720  in G III Apparel Group on September 12, 2024 and sell it today you would earn a total of  300.00  from holding G III Apparel Group or generate 11.03% return on investment over 90 days.

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

G III Apparel Group  vs.  BANKINTER ADR 2007

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 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BANKINTER ADR 2007

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BANKINTER ADR 2007 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, BANKINTER ADR is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with G III and BANKINTER ADR

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

The idea behind G III Apparel Group and BANKINTER ADR 2007 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.