Correlation Between G III and TFS FINANCIAL

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

Diversification Opportunities for G III and TFS FINANCIAL

0.47

Correlation Coefficient

G III  TFS FINANCIAL

Very weak diversification

The 3 months correlation between GI4 and TFS is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and TFS FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS FINANCIAL 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 TFS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS FINANCIAL has no effect on the direction of G III i.e., G III and TFS FINANCIAL go up and down completely randomly.

Pair Corralation between G III and TFS FINANCIAL

Assuming the 90 days trading horizon G III Apparel Group is expected to under-perform the TFS FINANCIAL. In addition to that, G III is 2.51 times more volatile than TFS FINANCIAL. It trades about -0.02 of its total potential returns per unit of risk. TFS FINANCIAL is currently generating about 0.1 per unit of volatility. If you would invest  1,038  in TFS FINANCIAL on April 20, 2025 and sell it today you would earn a total of  82.00  from holding TFS FINANCIAL or generate 7.9% return on investment over 90 days.

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

G III Apparel Group  vs.  TFS FINANCIAL

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. In spite of comparatively stable basic indicators, G III is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

TFS FINANCIAL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TFS FINANCIAL are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, TFS FINANCIAL may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with G III and TFS FINANCIAL

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

The idea behind G III Apparel Group and TFS FINANCIAL 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.