Correlation Between J Long and Xcel Brands
Can any of the company-specific risk be diversified away by investing in both J Long and Xcel Brands 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 J Long and Xcel Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Long Group Limited and Xcel Brands, you can compare the effects of market volatilities on J Long and Xcel Brands 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 J Long with a short position of Xcel Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Long and Xcel Brands.
Diversification Opportunities for J Long and Xcel Brands
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between J Long and Xcel is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding J Long Group Limited and Xcel Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xcel Brands and J Long 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 J Long Group Limited are associated (or correlated) with Xcel Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xcel Brands has no effect on the direction of J Long i.e., J Long and Xcel Brands go up and down completely randomly.
Pair Corralation between J Long and Xcel Brands
Allowing for the 90-day total investment horizon J Long Group Limited is expected to generate 4.44 times more return on investment than Xcel Brands. However, J Long is 4.44 times more volatile than Xcel Brands. It trades about 0.01 of its potential returns per unit of risk. Xcel Brands is currently generating about 0.01 per unit of risk. If you would invest 44.00 in J Long Group Limited on September 3, 2024 and sell it today you would lose (13.00) from holding J Long Group Limited or give up 29.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Long Group Limited vs. Xcel Brands
Performance |
| Timeline |
| J Long Group |
| Xcel Brands |
J Long and Xcel Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Long and Xcel Brands
The main advantage of trading using opposite J Long and Xcel Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Long position performs unexpectedly, Xcel Brands 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 Xcel Brands will offset losses from the drop in Xcel Brands' long position.| J Long vs. Xcel Brands | J Long vs. Gildan Activewear | J Long vs. Neo Concept International Group | J Long vs. Oxford Industries |
| Xcel Brands vs. H M Hennes | Xcel Brands vs. Under Armour C | Xcel Brands vs. H M Hennes | Xcel Brands vs. Oxford Industries |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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