Correlation Between Wolverine World and J Long
Can any of the company-specific risk be diversified away by investing in both Wolverine World and J Long 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 Wolverine World and J Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wolverine World Wide and J Long Group Limited, you can compare the effects of market volatilities on Wolverine World and J Long 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 Wolverine World with a short position of J Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wolverine World and J Long.
Diversification Opportunities for Wolverine World and J Long
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wolverine and J Long is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wolverine World Wide and J Long Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Long Group and Wolverine World 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 Wolverine World Wide are associated (or correlated) with J Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Long Group has no effect on the direction of Wolverine World i.e., Wolverine World and J Long go up and down completely randomly.
Pair Corralation between Wolverine World and J Long
Considering the 90-day investment horizon Wolverine World Wide is expected to generate 0.35 times more return on investment than J Long. However, Wolverine World Wide is 2.89 times less risky than J Long. It trades about 0.07 of its potential returns per unit of risk. J Long Group Limited is currently generating about -0.05 per unit of risk. If you would invest 983.00 in Wolverine World Wide on September 3, 2024 and sell it today you would earn a total of 1,370 from holding Wolverine World Wide or generate 139.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 43.84% |
| Values | Daily Returns |
Wolverine World Wide vs. J Long Group Limited
Performance |
| Timeline |
| Wolverine World Wide |
| J Long Group |
Wolverine World and J Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wolverine World and J Long
The main advantage of trading using opposite Wolverine World and J Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wolverine World position performs unexpectedly, J Long 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 Long will offset losses from the drop in J Long's long position.| Wolverine World vs. Weyco Group | Wolverine World vs. Rocky Brands | Wolverine World vs. Vera Bradley | Wolverine World vs. Caleres |
| J Long vs. Xcel Brands | J Long vs. Gildan Activewear | J Long vs. Neo Concept International Group | J Long 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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