Correlation Between Kontoor Brands and JJill

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

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

Diversification Opportunities for Kontoor Brands and JJill

0.91

Correlation Coefficient

Kontoor Brands  JJill

Almost no diversification

The 3 months correlation between Kontoor and JJill is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and Kontoor Brands 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 Kontoor Brands are associated (or correlated) with JJill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJill Inc has no effect on the direction of Kontoor Brands i.e., Kontoor Brands and JJill go up and down completely randomly.

Pair Corralation between Kontoor Brands and JJill

Considering the 90-day investment horizon Kontoor Brands is expected to generate 1.1 times more return on investment than JJill. However, Kontoor Brands is 1.1 times more volatile than JJill Inc. It trades about -0.15 of its potential returns per unit of risk. JJill Inc is currently generating about -0.21 per unit of risk. If you would invest  8,568  in Kontoor Brands on December 25, 2024 and sell it today you would lose (2,076) from holding Kontoor Brands or give up 24.23% of portfolio value over 90 days.

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

Kontoor Brands  vs.  JJill Inc

Kontoor Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kontoor Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

JJill Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days JJill Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Kontoor Brands and JJill

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

The idea behind Kontoor Brands and JJill 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.