Correlation Between Guess and AMCON Distributing

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

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

Diversification Opportunities for Guess and AMCON Distributing

-0.07

Correlation Coefficient

Guess  AMCON Distributing

Good diversification

The 3 months correlation between Guess and AMCON is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Guess Inc and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing and Guess 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 Guess Inc are associated (or correlated) with AMCON Distributing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMCON Distributing has no effect on the direction of Guess i.e., Guess and AMCON Distributing go up and down completely randomly.

Pair Corralation between Guess and AMCON Distributing

Considering the 90-day investment horizon Guess Inc is expected to under-perform the AMCON Distributing. In addition to that, Guess is 1.15 times more volatile than AMCON Distributing. It trades about -0.03 of its total potential returns per unit of risk. AMCON Distributing is currently generating about -0.03 per unit of volatility. 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

Guess Inc  vs.  AMCON Distributing

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.

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.

Pair Trading with Guess and AMCON Distributing

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

The idea behind Guess Inc and AMCON Distributing 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..