Correlation Between Lands End and Jeffs Brands

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

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

Diversification Opportunities for Lands End and Jeffs Brands

-0.69

Correlation Coefficient

Lands End  Jeffs Brands

Excellent diversification

The 3 months correlation between Lands and Jeffs is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lands End and Jeffs Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffs Brands and Lands End 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 Lands End are associated (or correlated) with Jeffs Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffs Brands has no effect on the direction of Lands End i.e., Lands End and Jeffs Brands go up and down completely randomly.

Pair Corralation between Lands End and Jeffs Brands

Allowing for the 90-day total investment horizon Lands End is expected to under-perform the Jeffs Brands. But the stock apears to be less risky and, when comparing its historical volatility, Lands End is 2.2 times less risky than Jeffs Brands. The stock trades about -0.18 of its potential returns per unit of risk. The Jeffs Brands is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  326.00  in Jeffs Brands on September 25, 2024 and sell it today you would lose (58.00) from holding Jeffs Brands or give up 17.79% of portfolio value over 90 days.

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

Lands End  vs.  Jeffs Brands

Lands End

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lands End has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Jeffs Brands

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jeffs Brands are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, Jeffs Brands reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lands End and Jeffs Brands

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

The idea behind Lands End and Jeffs Brands 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.