Correlation Between Sanrio Company and Guess
Can any of the company-specific risk be diversified away by investing in both Sanrio Company 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 Sanrio Company and Guess into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanrio Company and Guess Inc, you can compare the effects of market volatilities on Sanrio Company 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 Sanrio Company with a short position of Guess. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanrio Company and Guess.
Diversification Opportunities for Sanrio Company and Guess
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sanrio and Guess is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sanrio Company and Guess Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guess Inc and Sanrio Company 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 Sanrio Company 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 Sanrio Company i.e., Sanrio Company and Guess go up and down completely randomly.
Pair Corralation between Sanrio Company and Guess
Assuming the 90 days horizon Sanrio Company is expected to generate 1.66 times more return on investment than Guess. However, Sanrio Company is 1.66 times more volatile than Guess Inc. It trades about 0.15 of its potential returns per unit of risk. Guess Inc is currently generating about -0.01 per unit of risk. If you would invest 1,304 in Sanrio Company on September 4, 2024 and sell it today you would earn a total of 1,896 from holding Sanrio Company or generate 145.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 66.4% |
| Values | Daily Returns |
Sanrio Company vs. Guess Inc
Performance |
| Timeline |
| Sanrio Company |
| Guess Inc |
Sanrio Company and Guess Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanrio Company and Guess
The main advantage of trading using opposite Sanrio Company and Guess positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanrio Company 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.| Sanrio Company vs. Guess Inc | Sanrio Company vs. Foot Locker | Sanrio Company vs. JPMorgan Chase Co | Sanrio Company vs. Home Depot |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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