Correlation Between JJill and Tillys

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

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

Diversification Opportunities for JJill and Tillys

0.51

Correlation Coefficient

JJill  Tillys

Very weak diversification

The 3 months correlation between JJill and Tillys is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Tillys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tillys Inc 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 Tillys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tillys Inc has no effect on the direction of JJill i.e., JJill and Tillys go up and down completely randomly.

Pair Corralation between JJill and Tillys

Given the investment horizon of 90 days JJill Inc is expected to generate 0.8 times more return on investment than Tillys. However, JJill Inc is 1.25 times less risky than Tillys. It trades about -0.06 of its potential returns per unit of risk. Tillys Inc is currently generating about -0.08 per unit of risk. If you would invest  3,244  in JJill Inc on August 30, 2024 and sell it today you would lose (475.00) from holding JJill Inc or give up 14.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

JJill Inc  vs.  Tillys Inc

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 unfluctuating 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.

Tillys Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tillys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with JJill and Tillys

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

The idea behind JJill Inc and Tillys Inc 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.