Correlation Between JJill and Vera Bradley

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

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

Diversification Opportunities for JJill and Vera Bradley

-0.52

Correlation Coefficient

JJill  Vera Bradley

Excellent diversification

The 3 months correlation between JJill and Vera is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Vera Bradley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vera Bradley 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 Vera Bradley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vera Bradley has no effect on the direction of JJill i.e., JJill and Vera Bradley go up and down completely randomly.

Pair Corralation between JJill and Vera Bradley

Given the investment horizon of 90 days JJill Inc is expected to under-perform the Vera Bradley. In addition to that, JJill is 1.48 times more volatile than Vera Bradley. It trades about -0.48 of its total potential returns per unit of risk. Vera Bradley is currently generating about -0.04 per unit of volatility. If you would invest  670.00  in Vera Bradley on February 1, 2024 and sell it today you would lose (11.00) from holding Vera Bradley or give up 1.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

JJill Inc  vs.  Vera Bradley

JJill Inc

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, JJill may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Vera Bradley

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vera Bradley has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with JJill and Vera Bradley

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

The idea behind JJill Inc and Vera Bradley 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.

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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.