Correlation Between JJill and Powell Max

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

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

Diversification Opportunities for JJill and Powell Max

-0.38

Correlation Coefficient

JJill  Powell Max

Very good diversification

The 3 months correlation between JJill and Powell is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Powell Max Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powell Max Limited 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 Powell Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powell Max Limited has no effect on the direction of JJill i.e., JJill and Powell Max go up and down completely randomly.

Pair Corralation between JJill and Powell Max

Given the investment horizon of 90 days JJill Inc is expected to generate 0.41 times more return on investment than Powell Max. However, JJill Inc is 2.44 times less risky than Powell Max. It trades about 0.06 of its potential returns per unit of risk. Powell Max Limited is currently generating about -0.04 per unit of risk. If you would invest  2,487  in JJill Inc on September 19, 2024 and sell it today you would earn a total of  81.00  from holding JJill Inc or generate 3.26% 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.  Powell Max Limited

JJill Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, JJill may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Powell Max Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Powell Max Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with JJill and Powell Max

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

The idea behind JJill Inc and Powell Max Limited 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.