Correlation Between Skechers USA and JJill

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

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

Diversification Opportunities for Skechers USA and JJill

0.48

Correlation Coefficient

Skechers USA  JJill

Very weak diversification

The 3 months correlation between Skechers and JJill is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and Skechers USA 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 Skechers USA 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 Skechers USA i.e., Skechers USA and JJill go up and down completely randomly.

Pair Corralation between Skechers USA and JJill

Considering the 90-day investment horizon Skechers USA is expected to generate 1.3 times less return on investment than JJill. But when comparing it to its historical volatility, Skechers USA is 1.38 times less risky than JJill. It trades about 0.14 of its potential returns per unit of risk. JJill Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,385  in JJill Inc on October 1, 2024 and sell it today you would earn a total of  305.00  from holding JJill Inc or generate 12.79% return on investment over 90 days.

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

Skechers USA  vs.  JJill Inc

Skechers USA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Skechers USA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward-looking signals, Skechers USA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

JJill Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, JJill may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Skechers USA and JJill

The main advantage of trading using opposite Skechers USA and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA 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 Skechers USA 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.