Correlation Between Birks and Jeffs Brands
Can any of the company-specific risk be diversified away by investing in both Birks and Jeffs Brands 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 Birks and Jeffs Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birks Group and Jeffs Brands, you can compare the effects of market volatilities on Birks and Jeffs Brands 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 Birks with a short position of Jeffs Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birks and Jeffs Brands.
Diversification Opportunities for Birks and Jeffs Brands
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Birks and Jeffs is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Birks Group and Jeffs Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffs Brands and Birks 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 Birks Group are associated (or correlated) with Jeffs Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffs Brands has no effect on the direction of Birks i.e., Birks and Jeffs Brands go up and down completely randomly.
Pair Corralation between Birks and Jeffs Brands
Considering the 90-day investment horizon Birks Group is expected to under-perform the Jeffs Brands. But the stock apears to be less risky and, when comparing its historical volatility, Birks Group is 62.71 times less risky than Jeffs Brands. The stock trades about -0.45 of its potential returns per unit of risk. The Jeffs Brands is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Jeffs Brands on August 27, 2024 and sell it today you would earn a total of 296.00 from holding Jeffs Brands or generate 986.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Birks Group vs. Jeffs Brands
Performance |
| Timeline |
| Birks Group |
| Jeffs Brands |
Birks and Jeffs Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Birks and Jeffs Brands
The main advantage of trading using opposite Birks and Jeffs Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birks position performs unexpectedly, Jeffs Brands 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 Jeffs Brands will offset losses from the drop in Jeffs Brands' long position.The idea behind Birks Group and Jeffs Brands 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.| Jeffs Brands vs. Hour Loop | Jeffs Brands vs. Kidpik Corp | Jeffs Brands vs. MOGU Inc | Jeffs Brands vs. Jowell Global |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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