Correlation Between Guess and Express

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

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

Diversification Opportunities for Guess and Express

0.57

Correlation Coefficient

Guess  Express

Very weak diversification

The 3 months correlation between Guess and Express is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Guess Inc and Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Express 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 Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Express has no effect on the direction of Guess i.e., Guess and Express go up and down completely randomly.

Pair Corralation between Guess and Express

Considering the 90-day investment horizon Guess Inc is expected to generate 0.52 times more return on investment than Express. However, Guess Inc is 1.93 times less risky than Express. It trades about -0.01 of its potential returns per unit of risk. Express is currently generating about -0.03 per unit of risk. If you would invest  1,840  in Guess Inc on October 7, 2024 and sell it today you would lose (425.00) from holding Guess Inc or give up 23.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	26.41%
Values	Daily Returns

Guess Inc  vs.  Express

Guess Inc

Risk-Adjusted Performance

0 of 100

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Express

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Express has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Express is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Guess and Express

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

The idea behind Guess Inc and Express 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.