Correlation Between Guess and Dollar General
Can any of the company-specific risk be diversified away by investing in both Guess and Dollar General 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 Dollar General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guess Inc and Dollar General, you can compare the effects of market volatilities on Guess and Dollar General 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 Dollar General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guess and Dollar General.
Diversification Opportunities for Guess and Dollar General
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guess and Dollar is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Guess Inc and Dollar General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar General 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 Dollar General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar General has no effect on the direction of Guess i.e., Guess and Dollar General go up and down completely randomly.
Pair Corralation between Guess and Dollar General
Considering the 90-day investment horizon Guess Inc is expected to generate 5.0 times more return on investment than Dollar General. However, Guess is 5.0 times more volatile than Dollar General. It trades about 0.18 of its potential returns per unit of risk. Dollar General is currently generating about -0.25 per unit of risk. If you would invest 1,385 in Guess Inc on June 9, 2025 and sell it today you would earn a total of 301.00 from holding Guess Inc or generate 21.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guess Inc vs. Dollar General
Performance |
| Timeline |
| Guess Inc |
| Dollar General |
Guess and Dollar General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guess and Dollar General
The main advantage of trading using opposite Guess and Dollar General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guess position performs unexpectedly, Dollar General 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 Dollar General will offset losses from the drop in Dollar General's long position.The idea behind Guess Inc and Dollar General 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.| Dollar General vs. Dollar Tree | Dollar General vs. BJs Wholesale Club | Dollar General vs. Walmart | Dollar General vs. Target |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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