Correlation Between Lulus Fashion and JJill
Can any of the company-specific risk be diversified away by investing in both Lulus Fashion and JJill 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 Lulus Fashion and JJill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lulus Fashion Lounge and JJill Inc, you can compare the effects of market volatilities on Lulus Fashion and JJill 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 Lulus Fashion with a short position of JJill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lulus Fashion and JJill.
Diversification Opportunities for Lulus Fashion and JJill
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lulus and JJill is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Lulus Fashion Lounge and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and Lulus Fashion 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 Lulus Fashion Lounge are associated (or correlated) with JJill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJill Inc has no effect on the direction of Lulus Fashion i.e., Lulus Fashion and JJill go up and down completely randomly.
Pair Corralation between Lulus Fashion and JJill
Given the investment horizon of 90 days Lulus Fashion Lounge is expected to under-perform the JJill. In addition to that, Lulus Fashion is 1.88 times more volatile than JJill Inc. It trades about -0.04 of its total potential returns per unit of risk. JJill Inc is currently generating about -0.01 per unit of volatility. If you would invest 2,309 in JJill Inc on January 10, 2025 and sell it today you would lose (665.00) from holding JJill Inc or give up 28.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lulus Fashion Lounge vs. JJill Inc
Performance |
| Timeline |
| Lulus Fashion Lounge |
| JJill Inc |
Lulus Fashion and JJill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lulus Fashion and JJill
The main advantage of trading using opposite Lulus Fashion and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lulus Fashion position performs unexpectedly, JJill 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 JJill will offset losses from the drop in JJill's long position.| Lulus Fashion vs. Citi Trends | Lulus Fashion vs. Tillys Inc | Lulus Fashion vs. Zumiez Inc | Lulus Fashion vs. JJill 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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