Correlation Between JJill and Childrens Place

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

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

Diversification Opportunities for JJill and Childrens Place

-0.43

Correlation Coefficient

JJill  Childrens Place

Very good diversification

The 3 months correlation between JJill and Childrens is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Childrens Place in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Childrens Place 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 Childrens Place. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Childrens Place has no effect on the direction of JJill i.e., JJill and Childrens Place go up and down completely randomly.

Pair Corralation between JJill and Childrens Place

Given the investment horizon of 90 days JJill Inc is expected to under-perform the Childrens Place. But the stock apears to be less risky and, when comparing its historical volatility, JJill Inc is 4.57 times less risky than Childrens Place. The stock trades about -0.06 of its potential returns per unit of risk. The Childrens Place is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  544.00  in Childrens Place on September 1, 2024 and sell it today you would earn a total of  1,048  from holding Childrens Place or generate 192.65% return on investment over 90 days.

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

JJill Inc  vs.  Childrens Place

JJill Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JJill Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Childrens Place

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Childrens Place are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Childrens Place exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JJill and Childrens Place

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

The idea behind JJill Inc and Childrens Place 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..