Correlation Between AutoNation and JJill
Can any of the company-specific risk be diversified away by investing in both AutoNation 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 AutoNation and JJill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AutoNation and JJill Inc, you can compare the effects of market volatilities on AutoNation 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 AutoNation with a short position of JJill. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoNation and JJill.
Diversification Opportunities for AutoNation and JJill
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AutoNation and JJill is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding AutoNation and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and AutoNation 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 AutoNation 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 AutoNation i.e., AutoNation and JJill go up and down completely randomly.
Pair Corralation between AutoNation and JJill
Allowing for the 90-day total investment horizon AutoNation is expected to generate 0.62 times more return on investment than JJill. However, AutoNation is 1.6 times less risky than JJill. It trades about 0.08 of its potential returns per unit of risk. JJill Inc is currently generating about 0.03 per unit of risk. If you would invest 13,780 in AutoNation on November 9, 2024 and sell it today you would earn a total of 5,589 from holding AutoNation or generate 40.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AutoNation vs. JJill Inc
Performance |
| Timeline |
| AutoNation |
| JJill Inc |
AutoNation and JJill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AutoNation and JJill
The main advantage of trading using opposite AutoNation and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoNation 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.| AutoNation vs. Sonic Automotive | AutoNation vs. Lithia Motors | AutoNation vs. Asbury Automotive Group | AutoNation vs. Penske Automotive Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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