Correlation Between Gildan Activewear and Ever Glory

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

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

Diversification Opportunities for Gildan Activewear and Ever Glory

-0.72

Correlation Coefficient

Gildan Activewear  Ever Glory

Pay attention - limited upside

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

Pair Corralation between Gildan Activewear and Ever Glory

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

Gildan Activewear  vs.  Ever Glory International Group

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.

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.

Pair Trading with Gildan Activewear and Ever Glory

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

The idea behind Gildan Activewear and Ever Glory International 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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.