Correlation Between JJill and Designer Brands
Can any of the company-specific risk be diversified away by investing in both JJill and Designer Brands 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 JJill and Designer Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JJill Inc and Designer Brands, you can compare the effects of market volatilities on JJill and Designer Brands 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 JJill with a short position of Designer Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of JJill and Designer Brands.
Diversification Opportunities for JJill and Designer Brands
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JJill and Designer is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Designer Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Designer Brands and JJill 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 JJill Inc are associated (or correlated) with Designer Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Designer Brands has no effect on the direction of JJill i.e., JJill and Designer Brands go up and down completely randomly.
Pair Corralation between JJill and Designer Brands
Given the investment horizon of 90 days JJill Inc is expected to generate 0.67 times more return on investment than Designer Brands. However, JJill Inc is 1.49 times less risky than Designer Brands. It trades about 0.07 of its potential returns per unit of risk. Designer Brands is currently generating about 0.01 per unit of risk. If you would invest 1,525 in JJill Inc on December 29, 2023 and sell it today you would earn a total of 1,672 from holding JJill Inc or generate 109.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
JJill Inc vs. Designer Brands
Performance |
Timeline |
JJill Inc |
Designer Brands |
JJill and Designer Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JJill and Designer Brands
The main advantage of trading using opposite JJill and Designer Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JJill position performs unexpectedly, Designer Brands 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 Designer Brands will offset losses from the drop in Designer Brands' long position.JJill vs. J Long Group Limited | JJill vs. Duluth Holdings | JJill vs. Destination XL Group | JJill vs. Victorias Secret Co |
Designer Brands vs. On Holding | Designer Brands vs. Wolverine World Wide | Designer Brands vs. Phoenix Footwear Group | Designer Brands vs. American Rebel Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
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