Correlation Between AMCON Distributing and Guess

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

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

Diversification Opportunities for AMCON Distributing and Guess

-0.07

Correlation Coefficient

AMCON Distributing  Guess

Good diversification

The 3 months correlation between AMCON and Guess is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Guess Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guess Inc and AMCON Distributing 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 AMCON Distributing 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 AMCON Distributing i.e., AMCON Distributing and Guess go up and down completely randomly.

Pair Corralation between AMCON Distributing and Guess

Considering the 90-day investment horizon AMCON Distributing is expected to generate 0.87 times more return on investment than Guess. However, AMCON Distributing is 1.15 times less risky than Guess. It trades about -0.03 of its potential returns per unit of risk. Guess Inc is currently generating about -0.03 per unit of risk. If you would invest  13,456  in AMCON Distributing on December 27, 2024 and sell it today you would lose (1,565) from holding AMCON Distributing or give up 11.63% of portfolio value over 90 days.

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

AMCON Distributing  vs.  Guess Inc

AMCON Distributing

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMCON Distributing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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 latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with AMCON Distributing and Guess

The main advantage of trading using opposite AMCON Distributing and Guess positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing 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 AMCON Distributing 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.