Correlation Between Alimentation Couchen and Guess
Can any of the company-specific risk be diversified away by investing in both Alimentation Couchen 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 Alimentation Couchen and Guess into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alimentation Couchen Tard and Guess Inc, you can compare the effects of market volatilities on Alimentation Couchen 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 Alimentation Couchen with a short position of Guess. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimentation Couchen and Guess.
Diversification Opportunities for Alimentation Couchen and Guess
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alimentation and Guess is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Alimentation Couchen Tard and Guess Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guess Inc and Alimentation Couchen 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 Alimentation Couchen Tard 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 Alimentation Couchen i.e., Alimentation Couchen and Guess go up and down completely randomly.
Pair Corralation between Alimentation Couchen and Guess
Assuming the 90 days horizon Alimentation Couchen Tard is expected to generate 0.57 times more return on investment than Guess. However, Alimentation Couchen Tard is 1.76 times less risky than Guess. It trades about 0.13 of its potential returns per unit of risk. Guess Inc is currently generating about -0.18 per unit of risk. If you would invest 5,500 in Alimentation Couchen Tard on September 12, 2024 and sell it today you would earn a total of 230.00 from holding Alimentation Couchen Tard or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Alimentation Couchen Tard vs. Guess Inc
Performance |
| Timeline |
| Alimentation Couchen Tard |
| Guess Inc |
Alimentation Couchen and Guess Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimentation Couchen and Guess
The main advantage of trading using opposite Alimentation Couchen and Guess positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimentation Couchen 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.| Alimentation Couchen vs. Arko Corp | Alimentation Couchen vs. Arko Corp | Alimentation Couchen vs. Sportsmans | Alimentation Couchen vs. Murphy USA |
Check out your portfolio center.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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