Correlation Between JJill and J Long

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

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

Diversification Opportunities for JJill and J Long

-0.54

Correlation Coefficient

JJill  J Long

Excellent diversification

The 3 months correlation between JJill and J Long is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and J Long Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Long Group 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 J Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Long Group has no effect on the direction of JJill i.e., JJill and J Long go up and down completely randomly.

Pair Corralation between JJill and J Long

Given the investment horizon of 90 days JJill Inc is expected to generate 0.29 times more return on investment than J Long. However, JJill Inc is 3.44 times less risky than J Long. It trades about 0.01 of its potential returns per unit of risk. J Long Group Limited is currently generating about -0.06 per unit of risk. If you would invest  2,629  in JJill Inc on September 20, 2024 and sell it today you would lose (88.00) from holding JJill Inc or give up 3.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	91.97%
Values	Daily Returns

JJill Inc  vs.  J Long Group Limited

JJill Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, JJill is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

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 quite persistent essential indicators, J Long is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with JJill and J Long

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

The idea behind JJill Inc and J Long Group Limited 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.