Correlation Between American Eagle and JJill

Can any of the company-specific risk be diversified away by investing in both American Eagle 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 American Eagle and JJill into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Eagle Outfitters and JJill Inc, you can compare the effects of market volatilities on American Eagle 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 American Eagle with a short position of JJill. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and JJill.

Diversification Opportunities for American Eagle and JJill

-0.54

Correlation Coefficient

American Eagle  JJill

Excellent diversification

The 3 months correlation between American and JJill is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and American Eagle 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 American Eagle Outfitters 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 American Eagle i.e., American Eagle and JJill go up and down completely randomly.

Pair Corralation between American Eagle and JJill

Considering the 90-day investment horizon American Eagle Outfitters is expected to under-perform the JJill. In addition to that, American Eagle is 1.24 times more volatile than JJill Inc. It trades about -0.16 of its total potential returns per unit of risk. JJill Inc is currently generating about 0.04 per unit of volatility. If you would invest  2,483  in JJill Inc on September 21, 2024 and sell it today you would earn a total of  85.00  from holding JJill Inc or generate 3.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

American Eagle Outfitters  vs.  JJill Inc

American Eagle Outfitters

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Eagle Outfitters has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

JJill Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, JJill is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with American Eagle and JJill

The main advantage of trading using opposite American Eagle and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle 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.

The idea behind American Eagle Outfitters and JJill Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.