Correlation Between JJill and Birks

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

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

Diversification Opportunities for JJill and Birks

-0.83

Correlation Coefficient

JJill  Birks

Pay attention - limited upside

The 3 months correlation between JJill and Birks is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Birks Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birks Group and JJill 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 JJill Inc are associated (or correlated) with Birks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birks Group has no effect on the direction of JJill i.e., JJill and Birks go up and down completely randomly.

Pair Corralation between JJill and Birks

Given the investment horizon of 90 days JJill Inc is expected to generate 0.79 times more return on investment than Birks. However, JJill Inc is 1.27 times less risky than Birks. It trades about 0.01 of its potential returns per unit of risk. Birks Group is currently generating about -0.07 per unit of risk. If you would invest  2,943  in JJill Inc on October 25, 2024 and sell it today you would lose (199.00) from holding JJill Inc or give up 6.76% of portfolio value over 90 days.

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

JJill Inc  vs.  Birks Group

JJill Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, JJill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Birks Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Birks Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with JJill and Birks

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

The idea behind JJill Inc and Birks Group 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.