Correlation Between Columbia Sportswear and JJill

Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and JJill 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 Columbia Sportswear and JJill into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Columbia Sportswear and JJill Inc, you can compare the effects of market volatilities on Columbia Sportswear and JJill 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 Columbia Sportswear with a short position of JJill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and JJill.

Diversification Opportunities for Columbia Sportswear and JJill

0.43

Correlation Coefficient

Columbia Sportswear  JJill

Very weak diversification

The 3 months correlation between Columbia and JJill is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and Columbia Sportswear 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 Columbia Sportswear are associated (or correlated) with JJill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJill Inc has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and JJill go up and down completely randomly.

Pair Corralation between Columbia Sportswear and JJill

Given the investment horizon of 90 days Columbia Sportswear is expected to generate 8.13 times less return on investment than JJill. But when comparing it to its historical volatility, Columbia Sportswear is 3.03 times less risky than JJill. It trades about 0.17 of its potential returns per unit of risk. JJill Inc is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest  2,592  in JJill Inc on March 2, 2024 and sell it today you would earn a total of  802.00  from holding JJill Inc or generate 30.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Columbia Sportswear  vs.  JJill Inc

Columbia Sportswear

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Sportswear are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady essential indicators, Columbia Sportswear may actually be approaching a critical reversion point that can send shares even higher in July 2024.

JJill Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, JJill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Columbia Sportswear and JJill

The main advantage of trading using opposite Columbia Sportswear and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, JJill 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 JJill will offset losses from the drop in JJill's long position.

The idea behind Columbia Sportswear and JJill Inc 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.