Correlation Between CARSALESCOM and G-III APPAREL

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

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

Diversification Opportunities for CARSALESCOM and G-III APPAREL

-0.1

Correlation Coefficient

CARSALESCOM  G-III APPAREL

Good diversification

The 3 months correlation between CARSALESCOM and G-III is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CARSALESCOM 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 CARSALESCOM 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 CARSALESCOM are associated (or correlated) with G-III APPAREL. 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 CARSALESCOM i.e., CARSALESCOM and G-III APPAREL go up and down completely randomly.

Pair Corralation between CARSALESCOM and G-III APPAREL

Assuming the 90 days trading horizon CARSALESCOM is expected to generate 0.51 times more return on investment than G-III APPAREL. However, CARSALESCOM is 1.95 times less risky than G-III APPAREL. It trades about 0.13 of its potential returns per unit of risk. G III APPAREL GROUP is currently generating about -0.04 per unit of risk. If you would invest  1,840  in CARSALESCOM on April 25, 2025 and sell it today you would earn a total of  240.00  from holding CARSALESCOM or generate 13.04% return on investment over 90 days.

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

CARSALESCOM  vs.  G III APPAREL GROUP

CARSALESCOM

Risk-Adjusted Performance

OK

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

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 latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with CARSALESCOM and G-III APPAREL

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

The idea behind CARSALESCOM 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.