Correlation Between Buckle and Guess

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

By analyzing existing cross correlation between Buckle Inc and Guess Inc, you can compare the effects of market volatilities on Buckle and Guess 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 Buckle with a short position of Guess. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buckle and Guess.

Diversification Opportunities for Buckle and Guess

0.88

Correlation Coefficient

Buckle  Guess

Very poor diversification

The 3 months correlation between Buckle and Guess is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Buckle Inc and Guess Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guess Inc and Buckle 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 Buckle Inc are associated (or correlated) with Guess. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guess Inc has no effect on the direction of Buckle i.e., Buckle and Guess go up and down completely randomly.

Pair Corralation between Buckle and Guess

Considering the 90-day investment horizon Buckle Inc is expected to under-perform the Guess. But the stock apears to be less risky and, when comparing its historical volatility, Buckle Inc is 3.77 times less risky than Guess. The stock trades about -0.04 of its potential returns per unit of risk. The Guess Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,100  in Guess Inc on December 28, 2024 and sell it today you would earn a total of  46.00  from holding Guess Inc or generate 4.18% return on investment over 90 days.

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

Buckle Inc  vs.  Guess Inc

Buckle Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Buckle Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Guess Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guess Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Buckle and Guess

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

The idea behind Buckle Inc and Guess Inc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..