Correlation Between JJill and CDW Corp

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

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

Diversification Opportunities for JJill and CDW Corp

-0.66

Correlation Coefficient

JJill  CDW Corp

Excellent diversification

The 3 months correlation between JJill and CDW is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and CDW Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW Corp 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 CDW Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW Corp has no effect on the direction of JJill i.e., JJill and CDW Corp go up and down completely randomly.

Pair Corralation between JJill and CDW Corp

Given the investment horizon of 90 days JJill Inc is expected to generate 1.75 times more return on investment than CDW Corp. However, JJill is 1.75 times more volatile than CDW Corp. It trades about 0.02 of its potential returns per unit of risk. CDW Corp is currently generating about 0.01 per unit of risk. If you would invest  2,519  in JJill Inc on September 21, 2024 and sell it today you would earn a total of  49.00  from holding JJill Inc or generate 1.95% return on investment over 90 days.

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

JJill Inc  vs.  CDW Corp

JJill Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, JJill is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

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 weak 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.

Pair Trading with JJill and CDW Corp

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

The idea behind JJill Inc and CDW Corp 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.