Correlation Between Jackson Square and William Blair

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

By analyzing existing cross correlation between Jackson Square Smid Cap and William Blair Small Mid, you can compare the effects of market volatilities on Jackson Square and William Blair 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 Jackson Square with a short position of William Blair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Square and William Blair.

Diversification Opportunities for Jackson Square and William Blair

0.98

Correlation Coefficient

Jackson Square  William Blair

Almost no diversification

The 3 months correlation between Jackson and William is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Square Smid Cap and William Blair Small Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Blair Small and Jackson Square 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 Jackson Square Smid Cap are associated (or correlated) with William Blair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Blair Small has no effect on the direction of Jackson Square i.e., Jackson Square and William Blair go up and down completely randomly.

Pair Corralation between Jackson Square and William Blair

Assuming the 90 days horizon Jackson Square Smid Cap is expected to generate 1.24 times more return on investment than William Blair. However, Jackson Square is 1.24 times more volatile than William Blair Small Mid. It trades about 0.13 of its potential returns per unit of risk. William Blair Small Mid is currently generating about 0.13 per unit of risk. If you would invest  1,814  in Jackson Square Smid Cap on September 13, 2024 and sell it today you would earn a total of  168.00  from holding Jackson Square Smid Cap or generate 9.26% return on investment over 90 days.

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

Jackson Square Smid Cap  vs.  William Blair Small Mid

Jackson Square Smid

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jackson Square Smid Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Jackson Square may actually be approaching a critical reversion point that can send shares even higher in January 2025.

William Blair Small

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in William Blair Small Mid are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, William Blair may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jackson Square and William Blair

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

The idea behind Jackson Square Smid Cap and William Blair Small Mid 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 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.