Correlation Between Guess and Duluth Holdings
Can any of the company-specific risk be diversified away by investing in both Guess and Duluth Holdings 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 Duluth Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guess Inc and Duluth Holdings, you can compare the effects of market volatilities on Guess and Duluth Holdings 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 Duluth Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guess and Duluth Holdings.
Diversification Opportunities for Guess and Duluth Holdings
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guess and Duluth is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Guess Inc and Duluth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duluth Holdings 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 Duluth Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duluth Holdings has no effect on the direction of Guess i.e., Guess and Duluth Holdings go up and down completely randomly.
Pair Corralation between Guess and Duluth Holdings
Considering the 90-day investment horizon Guess Inc is expected to under-perform the Duluth Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Guess Inc is 1.51 times less risky than Duluth Holdings. The stock trades about -0.12 of its potential returns per unit of risk. The Duluth Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 411.00 in Duluth Holdings on August 24, 2024 and sell it today you would lose (45.00) from holding Duluth Holdings or give up 10.95% 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. Duluth Holdings
Performance |
| Timeline |
| Guess Inc |
| Duluth Holdings |
Guess and Duluth Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guess and Duluth Holdings
The main advantage of trading using opposite Guess and Duluth Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guess position performs unexpectedly, Duluth Holdings 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 Duluth Holdings will offset losses from the drop in Duluth Holdings' long position.The idea behind Guess Inc and Duluth Holdings 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.| Duluth Holdings vs. Ross Stores | Duluth Holdings vs. Childrens Place | Duluth Holdings vs. Guess Inc | Duluth Holdings vs. Cato Corporation |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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