Correlation Between JJill and Expand Energy
Can any of the company-specific risk be diversified away by investing in both JJill and Expand Energy 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 Expand Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JJill Inc and Expand Energy, you can compare the effects of market volatilities on JJill and Expand Energy 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 Expand Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of JJill and Expand Energy.
Diversification Opportunities for JJill and Expand Energy
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JJill and Expand is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Expand Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expand Energy 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 Expand Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expand Energy has no effect on the direction of JJill i.e., JJill and Expand Energy go up and down completely randomly.
Pair Corralation between JJill and Expand Energy
Given the investment horizon of 90 days JJill Inc is expected to under-perform the Expand Energy. In addition to that, JJill is 1.57 times more volatile than Expand Energy. It trades about -0.19 of its total potential returns per unit of risk. Expand Energy is currently generating about 0.14 per unit of volatility. If you would invest 9,605 in Expand Energy on December 27, 2024 and sell it today you would earn a total of 1,389 from holding Expand Energy or generate 14.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
JJill Inc vs. Expand Energy
Performance |
Timeline |
JJill Inc |
Expand Energy |
JJill and Expand Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JJill and Expand Energy
The main advantage of trading using opposite JJill and Expand Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JJill position performs unexpectedly, Expand Energy 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 Expand Energy will offset losses from the drop in Expand Energy's long position.The idea behind JJill Inc and Expand Energy 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.Expand Energy vs. Spyre Therapeutics | Expand Energy vs. Merit Medical Systems | Expand Energy vs. Northstar Clean Technologies | Expand Energy vs. Loews Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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