Correlation Between RETAIL FOOD and J JILL
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD and J JILL 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 RETAIL FOOD and J JILL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RETAIL FOOD GROUP and J JILL INC, you can compare the effects of market volatilities on RETAIL FOOD and J JILL 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 RETAIL FOOD with a short position of J JILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and J JILL.
Diversification Opportunities for RETAIL FOOD and J JILL
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RETAIL and 1MJ1 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and J JILL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J JILL INC and RETAIL FOOD 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 RETAIL FOOD GROUP are associated (or correlated) with J JILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J JILL INC has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and J JILL go up and down completely randomly.
Pair Corralation between RETAIL FOOD and J JILL
Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to generate 0.95 times more return on investment than J JILL. However, RETAIL FOOD GROUP is 1.05 times less risky than J JILL. It trades about 0.05 of its potential returns per unit of risk. J JILL INC is currently generating about 0.04 per unit of risk. If you would invest 2.95 in RETAIL FOOD GROUP on August 31, 2024 and sell it today you would earn a total of 1.25 from holding RETAIL FOOD GROUP or generate 42.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
RETAIL FOOD GROUP vs. J JILL INC
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| J JILL INC |
RETAIL FOOD and J JILL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and J JILL
The main advantage of trading using opposite RETAIL FOOD and J JILL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD position performs unexpectedly, J JILL 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 J JILL will offset losses from the drop in J JILL's long position.| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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