Correlation Between J Long and Vera Bradley

Can any of the company-specific risk be diversified away by investing in both J Long and Vera Bradley 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 Vera Bradley 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 Vera Bradley, you can compare the effects of market volatilities on J Long and Vera Bradley 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 Vera Bradley. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Long and Vera Bradley.

Diversification Opportunities for J Long and Vera Bradley

0.21

Correlation Coefficient

J Long  Vera Bradley

Modest diversification

The 3 months correlation between J Long and Vera is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding J Long Group Limited and Vera Bradley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vera Bradley 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 Vera Bradley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vera Bradley has no effect on the direction of J Long i.e., J Long and Vera Bradley go up and down completely randomly.

Pair Corralation between J Long and Vera Bradley

Allowing for the 90-day total investment horizon J Long Group Limited is expected to generate 3.12 times more return on investment than Vera Bradley. However, J Long is 3.12 times more volatile than Vera Bradley. It trades about 0.04 of its potential returns per unit of risk. Vera Bradley is currently generating about -0.15 per unit of risk. If you would invest  395.00  in J Long Group Limited on September 30, 2024 and sell it today you would lose (30.00) from holding J Long Group Limited or give up 7.59% of portfolio value over 90 days.

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

J Long Group Limited  vs.  Vera Bradley

J Long Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in J Long Group Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, J Long disclosed solid returns over the last few months and may actually be approaching a breakup point.

Vera Bradley

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vera Bradley has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with J Long and Vera Bradley

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

The idea behind J Long Group Limited and Vera Bradley 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.