Correlation Between Auto Trader and J JILL
Can any of the company-specific risk be diversified away by investing in both Auto Trader and J JILL 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 Auto Trader and J JILL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auto Trader Group and J JILL INC, you can compare the effects of market volatilities on Auto Trader and J JILL 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 Auto Trader with a short position of J JILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and J JILL.
Diversification Opportunities for Auto Trader and J JILL
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Auto and 1MJ1 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and J JILL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J JILL INC and Auto Trader 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 Auto Trader Group are associated (or correlated) with J JILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J JILL INC has no effect on the direction of Auto Trader i.e., Auto Trader and J JILL go up and down completely randomly.
Pair Corralation between Auto Trader and J JILL
Assuming the 90 days trading horizon Auto Trader Group is expected to generate 0.53 times more return on investment than J JILL. However, Auto Trader Group is 1.87 times less risky than J JILL. It trades about 0.07 of its potential returns per unit of risk. J JILL INC is currently generating about 0.04 per unit of risk. If you would invest 697.00 in Auto Trader Group on August 31, 2024 and sell it today you would earn a total of 313.00 from holding Auto Trader Group or generate 44.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Auto Trader Group vs. J JILL INC
Performance |
| Timeline |
| Auto Trader Group |
| J JILL INC |
Auto Trader and J JILL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auto Trader and J JILL
The main advantage of trading using opposite Auto Trader and J JILL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auto Trader position performs unexpectedly, J JILL 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 JILL will offset losses from the drop in J JILL's long position.| Auto Trader vs. NEWELL RUBBERMAID | Auto Trader vs. Reliance Steel Aluminum | Auto Trader vs. Hyster Yale Materials Handling | Auto Trader vs. COSMOSTEEL HLDGS |
| J JILL vs. MAGNUM MINING EXP | J JILL vs. MINCO SILVER | J JILL vs. Haverty Furniture Companies | J JILL vs. Taylor Morrison Home |
Check out your portfolio center.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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