Correlation Between Shoe Carnival and Guess
Can any of the company-specific risk be diversified away by investing in both Shoe Carnival 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 Shoe Carnival and Guess into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoe Carnival and Guess Inc, you can compare the effects of market volatilities on Shoe Carnival 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 Shoe Carnival with a short position of Guess. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoe Carnival and Guess.
Diversification Opportunities for Shoe Carnival and Guess
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shoe and Guess is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shoe Carnival and Guess Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guess Inc and Shoe Carnival 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 Shoe Carnival 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 Shoe Carnival i.e., Shoe Carnival and Guess go up and down completely randomly.
Pair Corralation between Shoe Carnival and Guess
Given the investment horizon of 90 days Shoe Carnival is expected to generate 1.58 times less return on investment than Guess. But when comparing it to its historical volatility, Shoe Carnival is 1.02 times less risky than Guess. It trades about 0.1 of its potential returns per unit of risk. Guess Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,198 in Guess Inc on June 11, 2025 and sell it today you would earn a total of 488.00 from holding Guess Inc or generate 40.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shoe Carnival vs. Guess Inc
Performance |
| Timeline |
| Shoe Carnival |
| Guess Inc |
Shoe Carnival and Guess Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoe Carnival and Guess
The main advantage of trading using opposite Shoe Carnival and Guess positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoe Carnival 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.| Shoe Carnival vs. Lanvin Group Holdings | Shoe Carnival vs. Movado Group | Shoe Carnival vs. Envela Corp | Shoe Carnival vs. Brilliant Earth Group |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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