Correlation Between J Long and JJill

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

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

Diversification Opportunities for J Long and JJill

-0.47

Correlation Coefficient

J Long  JJill

Very good diversification

The 3 months correlation between J Long and JJill is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding J Long Group Limited and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and J Long 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 J Long Group Limited 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 J Long i.e., J Long and JJill go up and down completely randomly.

Pair Corralation between J Long and JJill

Allowing for the 90-day total investment horizon J Long Group Limited is expected to generate 4.18 times more return on investment than JJill. However, J Long is 4.18 times more volatile than JJill Inc. It trades about -0.02 of its potential returns per unit of risk. JJill Inc is currently generating about -0.42 per unit of risk. If you would invest  96.00  in J Long Group Limited on January 30, 2024 and sell it today you would lose (12.00) from holding J Long Group Limited or give up 12.5% of portfolio value over 90 days.

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

J Long Group Limited  vs.  JJill Inc

J Long Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days J Long Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

JJill Inc

Risk-Adjusted Performance

3 of 100

Insignificant

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 May 2024.

Pair Trading with J Long and JJill

The main advantage of trading using opposite J Long and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Long 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 J Long Group Limited 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.

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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.