Correlation Between Ever Glory and Gildan Activewear

Can any of the company-specific risk be diversified away by investing in both Ever Glory and Gildan Activewear 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 Ever Glory and Gildan Activewear into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ever Glory International Group and Gildan Activewear, you can compare the effects of market volatilities on Ever Glory and Gildan Activewear 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 Ever Glory with a short position of Gildan Activewear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ever Glory and Gildan Activewear.

Diversification Opportunities for Ever Glory and Gildan Activewear

-0.72

Correlation Coefficient

Ever Glory  Gildan Activewear

Pay attention - limited upside

The 3 months correlation between Ever and Gildan is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ever Glory International Group and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear and Ever Glory 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 Ever Glory International Group are associated (or correlated) with Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of Ever Glory i.e., Ever Glory and Gildan Activewear go up and down completely randomly.

Pair Corralation between Ever Glory and Gildan Activewear

If you would invest  22.00  in Ever Glory International Group on January 25, 2024 and sell it today you would earn a total of  0.00  from holding Ever Glory International Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Ever Glory International Group  vs.  Gildan Activewear

Ever Glory Internati

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ever Glory International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Ever Glory is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Gildan Activewear

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gildan Activewear are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady forward indicators, Gildan Activewear may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Ever Glory and Gildan Activewear

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

The idea behind Ever Glory International Group and Gildan Activewear 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.