Correlation Between Childrens Place and Guess
Can any of the company-specific risk be diversified away by investing in both Childrens Place 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 Childrens Place and Guess into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Childrens Place and Guess Inc, you can compare the effects of market volatilities on Childrens Place 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 Childrens Place with a short position of Guess. Check out your portfolio center. Please also check ongoing floating volatility patterns of Childrens Place and Guess.
Diversification Opportunities for Childrens Place and Guess
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Childrens and Guess is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Childrens Place and Guess Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guess Inc and Childrens Place 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 Childrens Place 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 Childrens Place i.e., Childrens Place and Guess go up and down completely randomly.
Pair Corralation between Childrens Place and Guess
Given the investment horizon of 90 days Childrens Place is expected to generate 3.14 times more return on investment than Guess. However, Childrens Place is 3.14 times more volatile than Guess Inc. It trades about 0.36 of its potential returns per unit of risk. Guess Inc is currently generating about -0.18 per unit of risk. If you would invest 1,113 in Childrens Place on August 24, 2024 and sell it today you would earn a total of 517.00 from holding Childrens Place or generate 46.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Childrens Place vs. Guess Inc
Performance |
| Timeline |
| Childrens Place |
| Guess Inc |
Childrens Place and Guess Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Childrens Place and Guess
The main advantage of trading using opposite Childrens Place and Guess positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Childrens Place 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.| Childrens Place vs. Ross Stores | Childrens Place vs. Buckle Inc | Childrens Place vs. Guess Inc | Childrens Place vs. Abercrombie Fitch |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |