Correlation Between JJill and Steven Madden

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

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

Diversification Opportunities for JJill and Steven Madden

-0.49

Correlation Coefficient

JJill  Steven Madden

Very good diversification

The 3 months correlation between JJill and Steven is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden 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 Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of JJill i.e., JJill and Steven Madden go up and down completely randomly.

Pair Corralation between JJill and Steven Madden

Given the investment horizon of 90 days JJill Inc is expected to generate 2.39 times more return on investment than Steven Madden. However, JJill is 2.39 times more volatile than Steven Madden. It trades about -0.03 of its potential returns per unit of risk. Steven Madden is currently generating about -0.3 per unit of risk. If you would invest  2,753  in JJill Inc on September 29, 2024 and sell it today you would lose (63.00) from holding JJill Inc or give up 2.29% 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.  Steven Madden

JJill Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 5 (%) 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 January 2025.

Steven Madden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Steven Madden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with JJill and Steven Madden

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

The idea behind JJill Inc and Steven Madden 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.