Correlation Between JJill and Boyd Gaming

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

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

Diversification Opportunities for JJill and Boyd Gaming

0.67

Correlation Coefficient

JJill  Boyd Gaming

Poor diversification

The 3 months correlation between JJill and Boyd is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming 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 Boyd Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boyd Gaming has no effect on the direction of JJill i.e., JJill and Boyd Gaming go up and down completely randomly.

Pair Corralation between JJill and Boyd Gaming

Given the investment horizon of 90 days JJill Inc is expected to generate 2.98 times more return on investment than Boyd Gaming. However, JJill is 2.98 times more volatile than Boyd Gaming. It trades about 0.13 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.11 per unit of risk. If you would invest  2,594  in JJill Inc on September 12, 2024 and sell it today you would earn a total of  172.00  from holding JJill Inc or generate 6.63% return on investment over 90 days.

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

JJill Inc  vs.  Boyd Gaming

JJill Inc

Risk-Adjusted Performance

7 of 100

Modest

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 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Boyd Gaming

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Boyd Gaming exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JJill and Boyd Gaming

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

The idea behind JJill Inc and Boyd Gaming 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.