Correlation Between JJill and Carbon Energy
Can any of the company-specific risk be diversified away by investing in both JJill and Carbon Energy 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 JJill and Carbon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JJill Inc and Carbon Energy, you can compare the effects of market volatilities on JJill and Carbon Energy 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 JJill with a short position of Carbon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of JJill and Carbon Energy.
Diversification Opportunities for JJill and Carbon Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JJill and Carbon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Carbon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbon Energy and JJill 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 JJill Inc are associated (or correlated) with Carbon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbon Energy has no effect on the direction of JJill i.e., JJill and Carbon Energy go up and down completely randomly.
Pair Corralation between JJill and Carbon Energy
Given the investment horizon of 90 days JJill is expected to generate 7.99 times less return on investment than Carbon Energy. But when comparing it to its historical volatility, JJill Inc is 1.73 times less risky than Carbon Energy. It trades about 0.02 of its potential returns per unit of risk. Carbon Energy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Carbon Energy on September 14, 2024 and sell it today you would earn a total of 12.00 from holding Carbon Energy or generate 92.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 57.43% |
| Values | Daily Returns |
JJill Inc vs. Carbon Energy
Performance |
| Timeline |
| JJill Inc |
| Carbon Energy |
JJill and Carbon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JJill and Carbon Energy
The main advantage of trading using opposite JJill and Carbon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JJill position performs unexpectedly, Carbon Energy 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 Carbon Energy will offset losses from the drop in Carbon Energy's long position.The idea behind JJill Inc and Carbon Energy 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.| Carbon Energy vs. Sligro Food Group | Carbon Energy vs. Allegheny Technologies Incorporated | Carbon Energy vs. Comstock Holding Companies | Carbon Energy vs. Ironveld Plc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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