Correlation Between JJill and PAMT P

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Can any of the company-specific risk be diversified away by investing in both JJill and PAMT P 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 PAMT P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JJill Inc and PAMT P, you can compare the effects of market volatilities on JJill and PAMT P 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 PAMT P. Check out your portfolio center. Please also check ongoing floating volatility patterns of JJill and PAMT P.

Diversification Opportunities for JJill and PAMT P

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between JJill and PAMT is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and PAMT P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAMT P 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 PAMT P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAMT P has no effect on the direction of JJill i.e., JJill and PAMT P go up and down completely randomly.

Pair Corralation between JJill and PAMT P

Given the investment horizon of 90 days JJill Inc is expected to generate 0.84 times more return on investment than PAMT P. However, JJill Inc is 1.2 times less risky than PAMT P. It trades about 0.03 of its potential returns per unit of risk. PAMT P is currently generating about 0.01 per unit of risk. If you would invest  2,512  in JJill Inc on September 4, 2024 and sell it today you would earn a total of  248.00  from holding JJill Inc or generate 9.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

JJill Inc  vs.  PAMT P

 Performance 
       Timeline  
JJill Inc 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, JJill is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.
PAMT P 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in PAMT P are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating primary indicators, PAMT P may actually be approaching a critical reversion point that can send shares even higher in January 2025.

JJill and PAMT P Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JJill and PAMT P

The main advantage of trading using opposite JJill and PAMT P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JJill position performs unexpectedly, PAMT P 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 PAMT P will offset losses from the drop in PAMT P's long position.
The idea behind JJill Inc and PAMT P 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.
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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