Correlation Between Destination and Jowell Global

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

By analyzing existing cross correlation between Destination XL Group and Jowell Global, you can compare the effects of market volatilities on Destination and Jowell Global 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 Destination with a short position of Jowell Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Destination and Jowell Global.

Diversification Opportunities for Destination and Jowell Global

-0.59

Correlation Coefficient

Destination  Jowell Global

Excellent diversification

The 3 months correlation between Destination and Jowell is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Destination XL Group and Jowell Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jowell Global and Destination 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 Destination XL Group are associated (or correlated) with Jowell Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jowell Global has no effect on the direction of Destination i.e., Destination and Jowell Global go up and down completely randomly.

Pair Corralation between Destination and Jowell Global

Given the investment horizon of 90 days Destination XL Group is expected to under-perform the Jowell Global. But the stock apears to be less risky and, when comparing its historical volatility, Destination XL Group is 4.08 times less risky than Jowell Global. The stock trades about -0.06 of its potential returns per unit of risk. The Jowell Global is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  746.00  in Jowell Global on September 3, 2024 and sell it today you would lose (433.00) from holding Jowell Global or give up 58.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.99%
Values	Daily Returns

Destination XL Group  vs.  Jowell Global

Destination XL Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Destination XL Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Jowell Global

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jowell Global are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile technical and fundamental indicators, Jowell Global disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Destination and Jowell Global

The main advantage of trading using opposite Destination and Jowell Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Destination position performs unexpectedly, Jowell Global 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 Jowell Global will offset losses from the drop in Jowell Global's long position.

The idea behind Destination XL Group and Jowell Global 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.