Correlation Between Talen Energy and JJill
Can any of the company-specific risk be diversified away by investing in both Talen Energy 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 Talen Energy and JJill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talen Energy and JJill Inc, you can compare the effects of market volatilities on Talen Energy 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 Talen Energy with a short position of JJill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talen Energy and JJill.
Diversification Opportunities for Talen Energy and JJill
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Talen and JJill is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Talen Energy and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and Talen Energy 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 Talen Energy 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 Talen Energy i.e., Talen Energy and JJill go up and down completely randomly.
Pair Corralation between Talen Energy and JJill
Considering the 90-day investment horizon Talen Energy is expected to generate 1.5 times more return on investment than JJill. However, Talen Energy is 1.5 times more volatile than JJill Inc. It trades about 0.28 of its potential returns per unit of risk. JJill Inc is currently generating about 0.28 per unit of risk. If you would invest 17,000 in Talen Energy on September 4, 2024 and sell it today you would earn a total of 3,981 from holding Talen Energy or generate 23.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talen Energy vs. JJill Inc
Performance |
| Timeline |
| Talen Energy |
| JJill Inc |
Talen Energy and JJill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talen Energy and JJill
The main advantage of trading using opposite Talen Energy and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talen Energy 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.| Talen Energy vs. JJill Inc | Talen Energy vs. Jacobs Solutions | Talen Energy vs. Figs Inc | Talen Energy vs. Sabre Corpo |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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