Correlation Between JJill and Gildan Activewear

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

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

Diversification Opportunities for JJill and Gildan Activewear

0.12

Correlation Coefficient

JJill  Gildan Activewear

Average diversification

The 3 months correlation between JJill and Gildan is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear 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 Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of JJill i.e., JJill and Gildan Activewear go up and down completely randomly.

Pair Corralation between JJill and Gildan Activewear

Given the investment horizon of 90 days JJill Inc is expected to generate 2.38 times more return on investment than Gildan Activewear. However, JJill is 2.38 times more volatile than Gildan Activewear. It trades about 0.12 of its potential returns per unit of risk. Gildan Activewear is currently generating about 0.05 per unit of risk. If you would invest  2,442  in JJill Inc on October 21, 2024 and sell it today you would earn a total of  287.00  from holding JJill Inc or generate 11.75% return on investment over 90 days.

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

JJill Inc  vs.  Gildan Activewear

JJill Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 6 (%) 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 February 2025.

Gildan Activewear

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gildan Activewear are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, Gildan Activewear is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with JJill and Gildan Activewear

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

The idea behind JJill Inc and Gildan Activewear 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.