Correlation Between Steven Madden and JJill

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

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

Diversification Opportunities for Steven Madden and JJill

-0.49

Correlation Coefficient

Steven Madden  JJill

Very good diversification

The 3 months correlation between Steven and JJill is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and Steven Madden 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 Steven Madden 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 Steven Madden i.e., Steven Madden and JJill go up and down completely randomly.

Pair Corralation between Steven Madden and JJill

Given the investment horizon of 90 days Steven Madden is expected to generate 0.62 times more return on investment than JJill. However, Steven Madden is 1.62 times less risky than JJill. It trades about 0.05 of its potential returns per unit of risk. JJill Inc is currently generating about 0.02 per unit of risk. If you would invest  3,049  in Steven Madden on September 29, 2024 and sell it today you would earn a total of  1,184  from holding Steven Madden or generate 38.83% return on investment over 90 days.

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

Steven Madden  vs.  JJill Inc

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.

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.

Pair Trading with Steven Madden and JJill

The main advantage of trading using opposite Steven Madden and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden 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 Steven Madden 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.