Correlation Between JJill and Bridgford Foods

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

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

Diversification Opportunities for JJill and Bridgford Foods

0.59

Correlation Coefficient

JJill  Bridgford Foods

Very weak diversification

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

Pair Corralation between JJill and Bridgford Foods

Given the investment horizon of 90 days JJill Inc is expected to generate 1.11 times more return on investment than Bridgford Foods. However, JJill is 1.11 times more volatile than Bridgford Foods. It trades about 0.01 of its potential returns per unit of risk. Bridgford Foods is currently generating about 0.01 per unit of risk. If you would invest  2,872  in JJill Inc on October 5, 2024 and sell it today you would lose (53.00) from holding JJill Inc or give up 1.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.71%
Values	Daily Returns

JJill Inc  vs.  Bridgford Foods

JJill Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 9 (%) 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.

Bridgford Foods

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bridgford Foods are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Bridgford Foods exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JJill and Bridgford Foods

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

The idea behind JJill Inc and Bridgford Foods 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.