Correlation Between Citi Trends and JJill

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

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

Diversification Opportunities for Citi Trends and JJill

-0.52

Correlation Coefficient

Citi Trends  JJill

Excellent diversification

The 3 months correlation between Citi and JJill is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and Citi Trends 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 Citi Trends 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 Citi Trends i.e., Citi Trends and JJill go up and down completely randomly.

Pair Corralation between Citi Trends and JJill

Given the investment horizon of 90 days Citi Trends is expected to generate 5.83 times less return on investment than JJill. In addition to that, Citi Trends is 1.41 times more volatile than JJill Inc. It trades about 0.02 of its total potential returns per unit of risk. JJill Inc is currently generating about 0.2 per unit of volatility. If you would invest  2,489  in JJill Inc on August 30, 2024 and sell it today you would earn a total of  280.00  from holding JJill Inc or generate 11.25% return on investment over 90 days.

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

Citi Trends  vs.  JJill Inc

Citi Trends

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citi Trends are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Citi Trends displayed solid returns over the last few months and may actually be approaching a breakup point.

JJill Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JJill Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Citi Trends and JJill

The main advantage of trading using opposite Citi Trends and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends 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 Citi Trends 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.