Correlation Between G III and FUYO GENERAL

Can any of the company-specific risk be diversified away by investing in both G III and FUYO GENERAL 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 FUYO GENERAL 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 FUYO GENERAL LEASE, you can compare the effects of market volatilities on G III and FUYO GENERAL 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 FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and FUYO GENERAL.

Diversification Opportunities for G III and FUYO GENERAL

0.25

Correlation Coefficient

G III  FUYO GENERAL

Modest diversification

The 3 months correlation between GI4 and FUYO is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE 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 FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of G III i.e., G III and FUYO GENERAL go up and down completely randomly.

Pair Corralation between G III and FUYO GENERAL

Assuming the 90 days trading horizon G III Apparel Group is expected to generate 0.8 times more return on investment than FUYO GENERAL. However, G III Apparel Group is 1.26 times less risky than FUYO GENERAL. It trades about -0.18 of its potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about -0.2 per unit of risk. If you would invest  2,700  in G III Apparel Group on February 23, 2024 and sell it today you would lose (160.00) from holding G III Apparel Group or give up 5.93% of portfolio value over 90 days.

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

G III Apparel Group  vs.  FUYO GENERAL LEASE

G III Apparel

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

FUYO GENERAL LEASE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FUYO GENERAL LEASE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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 G III and FUYO GENERAL

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

The idea behind G III Apparel Group and FUYO GENERAL LEASE 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 Commodity Directory module to find actively traded commodities issued by global exchanges.