Correlation Between JJill and 538034AN9

Can any of the company-specific risk be diversified away by investing in both JJill and 538034AN9 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 538034AN9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JJill Inc and Live Nation Entertainment, you can compare the effects of market volatilities on JJill and 538034AN9 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 538034AN9. Check out your portfolio center. Please also check ongoing floating volatility patterns of JJill and 538034AN9.

Diversification Opportunities for JJill and 538034AN9

-0.2

Correlation Coefficient

JJill  538034AN9

Good diversification

The 3 months correlation between JJill and 538034AN9 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment 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 538034AN9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of JJill i.e., JJill and 538034AN9 go up and down completely randomly.

Pair Corralation between JJill and 538034AN9

Given the investment horizon of 90 days JJill Inc is expected to under-perform the 538034AN9. In addition to that, JJill is 3.59 times more volatile than Live Nation Entertainment. It trades about -0.06 of its total potential returns per unit of risk. Live Nation Entertainment is currently generating about -0.07 per unit of volatility. If you would invest  9,950  in Live Nation Entertainment on August 31, 2024 and sell it today you would lose (275.00) from holding Live Nation Entertainment or give up 2.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

JJill Inc  vs.  Live Nation Entertainment

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.

Live Nation Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Live Nation Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 538034AN9 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JJill and 538034AN9

The main advantage of trading using opposite JJill and 538034AN9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JJill position performs unexpectedly, 538034AN9 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 538034AN9 will offset losses from the drop in 538034AN9's long position.

The idea behind JJill Inc and Live Nation Entertainment 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.