Correlation Between CDW Corp and JJill

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

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

Diversification Opportunities for CDW Corp and JJill

-0.68

Correlation Coefficient

CDW Corp  JJill

Excellent diversification

The 3 months correlation between CDW and JJill is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and CDW Corp 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 CDW Corp 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 CDW Corp i.e., CDW Corp and JJill go up and down completely randomly.

Pair Corralation between CDW Corp and JJill

Considering the 90-day investment horizon CDW Corp is expected to generate 0.51 times more return on investment than JJill. However, CDW Corp is 1.98 times less risky than JJill. It trades about -0.12 of its potential returns per unit of risk. JJill Inc is currently generating about -0.1 per unit of risk. If you would invest  18,134  in CDW Corp on September 25, 2024 and sell it today you would lose (578.00) from holding CDW Corp or give up 3.19% of portfolio value over 90 days.

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

CDW Corp  vs.  JJill Inc

CDW Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CDW Corp 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 fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

JJill Inc

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, JJill may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CDW Corp and JJill

The main advantage of trading using opposite CDW Corp and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp 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 CDW Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.