Correlation Between Destination and JJill
Can any of the company-specific risk be diversified away by investing in both Destination 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 Destination and JJill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Destination XL Group and JJill Inc, you can compare the effects of market volatilities on Destination 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 Destination with a short position of JJill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Destination and JJill.
Diversification Opportunities for Destination and JJill
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Destination and JJill is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Destination XL Group and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and Destination 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 Destination XL Group 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 Destination i.e., Destination and JJill go up and down completely randomly.
Pair Corralation between Destination and JJill
Given the investment horizon of 90 days Destination XL Group is expected to under-perform the JJill. In addition to that, Destination is 2.14 times more volatile than JJill Inc. It trades about -0.13 of its total potential returns per unit of risk. JJill Inc is currently generating about -0.18 per unit of volatility. If you would invest 2,729 in JJill Inc on November 18, 2024 and sell it today you would lose (158.00) from holding JJill Inc or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Destination XL Group vs. JJill Inc
Performance |
| Timeline |
| Destination XL Group |
| JJill Inc |
Destination and JJill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Destination and JJill
The main advantage of trading using opposite Destination and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Destination 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.| Destination vs. Cato Corporation | Destination vs. Zumiez Inc | Destination vs. Tillys Inc | Destination vs. Duluth Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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