Correlation Between G III and Superior Uniform

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

Diversification Opportunities for G III and Superior Uniform

0.34

Correlation Coefficient

G III  Superior Uniform

Weak diversification

The 3 months correlation between GIII and Superior is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Superior Uniform Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Uniform 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 Superior Uniform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Uniform has no effect on the direction of G III i.e., G III and Superior Uniform go up and down completely randomly.

Pair Corralation between G III and Superior Uniform

Given the investment horizon of 90 days G III Apparel Group is expected to generate 0.98 times more return on investment than Superior Uniform. However, G III Apparel Group is 1.02 times less risky than Superior Uniform. It trades about 0.07 of its potential returns per unit of risk. Superior Uniform Group is currently generating about 0.05 per unit of risk. If you would invest  1,492  in G III Apparel Group on September 28, 2024 and sell it today you would earn a total of  1,766  from holding G III Apparel Group or generate 118.4% return on investment 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.  Superior Uniform Group

G III Apparel

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in G III Apparel Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward indicators, G III may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Superior Uniform

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with G III and Superior Uniform

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

The idea behind G III Apparel Group and Superior Uniform 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.