Correlation Between Under Armour and JJill

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

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

Diversification Opportunities for Under Armour and JJill

0.53

Correlation Coefficient

Under Armour  JJill

Very weak diversification

The 3 months correlation between Under and JJill is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and Under Armour 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 Under Armour C 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 Under Armour i.e., Under Armour and JJill go up and down completely randomly.

Pair Corralation between Under Armour and JJill

Allowing for the 90-day total investment horizon Under Armour C is expected to under-perform the JJill. But the stock apears to be less risky and, when comparing its historical volatility, Under Armour C is 1.02 times less risky than JJill. The stock trades about -0.13 of its potential returns per unit of risk. The JJill Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,442  in JJill Inc on September 20, 2024 and sell it today you would earn a total of  126.00  from holding JJill Inc or generate 5.16% return on investment over 90 days.

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

Under Armour C  vs.  JJill Inc

Under Armour C

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Under Armour C are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Under Armour may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with Under Armour and JJill

The main advantage of trading using opposite Under Armour and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour 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 Under Armour C 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.