Correlation Between JJill and Everus Construction

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

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

Diversification Opportunities for JJill and Everus Construction

0.42

Correlation Coefficient

JJill  Everus Construction

Very weak diversification

The 3 months correlation between JJill and Everus is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Everus Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everus Construction 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 Everus Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everus Construction has no effect on the direction of JJill i.e., JJill and Everus Construction go up and down completely randomly.

Pair Corralation between JJill and Everus Construction

Given the investment horizon of 90 days JJill Inc is expected to under-perform the Everus Construction. But the stock apears to be less risky and, when comparing its historical volatility, JJill Inc is 1.34 times less risky than Everus Construction. The stock trades about -0.02 of its potential returns per unit of risk. The Everus Construction Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  6,783  in Everus Construction Group on October 12, 2024 and sell it today you would lose (117.00) from holding Everus Construction Group or give up 1.72% of portfolio value over 90 days.

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

JJill Inc  vs.  Everus Construction 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.

Everus Construction

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Everus Construction Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Everus Construction reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JJill and Everus Construction

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

The idea behind JJill Inc and Everus Construction 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.