Correlation Between JJill and Victorias Secret
Can any of the company-specific risk be diversified away by investing in both JJill and Victorias Secret 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 Victorias Secret into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JJill Inc and Victorias Secret Co, you can compare the effects of market volatilities on JJill and Victorias Secret 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 Victorias Secret. Check out your portfolio center. Please also check ongoing floating volatility patterns of JJill and Victorias Secret.
Diversification Opportunities for JJill and Victorias Secret
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JJill and Victorias is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Victorias Secret Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victorias Secret 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 Victorias Secret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victorias Secret has no effect on the direction of JJill i.e., JJill and Victorias Secret go up and down completely randomly.
Pair Corralation between JJill and Victorias Secret
Given the investment horizon of 90 days JJill Inc is expected to generate 0.71 times more return on investment than Victorias Secret. However, JJill Inc is 1.42 times less risky than Victorias Secret. It trades about -0.33 of its potential returns per unit of risk. Victorias Secret Co is currently generating about -0.53 per unit of risk. If you would invest 2,772 in JJill Inc on November 27, 2024 and sell it today you would lose (306.00) from holding JJill Inc or give up 11.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJill Inc vs. Victorias Secret Co
Performance |
| Timeline |
| JJill Inc |
| Victorias Secret |
JJill and Victorias Secret Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JJill and Victorias Secret
The main advantage of trading using opposite JJill and Victorias Secret positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JJill position performs unexpectedly, Victorias Secret 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 Victorias Secret will offset losses from the drop in Victorias Secret's long position.The idea behind JJill Inc and Victorias Secret Co 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.| Victorias Secret vs. Ross Stores | Victorias Secret vs. Childrens Place | Victorias Secret vs. Buckle Inc | Victorias Secret vs. Guess Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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