Correlation Between JJill and Q2 Holdings
Can any of the company-specific risk be diversified away by investing in both JJill and Q2 Holdings 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 Q2 Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JJill Inc and Q2 Holdings, you can compare the effects of market volatilities on JJill and Q2 Holdings 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 Q2 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of JJill and Q2 Holdings.
Diversification Opportunities for JJill and Q2 Holdings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JJill and QTWO is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Q2 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q2 Holdings 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 Q2 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q2 Holdings has no effect on the direction of JJill i.e., JJill and Q2 Holdings go up and down completely randomly.
Pair Corralation between JJill and Q2 Holdings
Given the investment horizon of 90 days JJill Inc is expected to under-perform the Q2 Holdings. But the stock apears to be less risky and, when comparing its historical volatility, JJill Inc is 1.13 times less risky than Q2 Holdings. The stock trades about -0.27 of its potential returns per unit of risk. The Q2 Holdings is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 9,347 in Q2 Holdings on November 28, 2024 and sell it today you would lose (726.00) from holding Q2 Holdings or give up 7.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJill Inc vs. Q2 Holdings
Performance |
| Timeline |
| JJill Inc |
| Q2 Holdings |
JJill and Q2 Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JJill and Q2 Holdings
The main advantage of trading using opposite JJill and Q2 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JJill position performs unexpectedly, Q2 Holdings 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 Q2 Holdings will offset losses from the drop in Q2 Holdings' long position.The idea behind JJill Inc and Q2 Holdings 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.| Q2 Holdings vs. PROS Holdings | Q2 Holdings vs. Meridianlink | Q2 Holdings vs. Enfusion | Q2 Holdings vs. Paylocity Holdng |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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