Correlation Between Urban Outfitters and JINS HOLDINGS

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

By analyzing existing cross correlation between Urban Outfitters and JINS HOLDINGS INC, you can compare the effects of market volatilities on Urban Outfitters and JINS HOLDINGS 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 Urban Outfitters with a short position of JINS HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Outfitters and JINS HOLDINGS.

Diversification Opportunities for Urban Outfitters and JINS HOLDINGS

0.07

Correlation Coefficient

Urban Outfitters  JINS HOLDINGS

Significant diversification

The 3 months correlation between Urban and JINS is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Urban Outfitters and JINS HOLDINGS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JINS HOLDINGS INC and Urban Outfitters 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 Urban Outfitters are associated (or correlated) with JINS HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JINS HOLDINGS INC has no effect on the direction of Urban Outfitters i.e., Urban Outfitters and JINS HOLDINGS go up and down completely randomly.

Pair Corralation between Urban Outfitters and JINS HOLDINGS

Assuming the 90 days horizon Urban Outfitters is expected to under-perform the JINS HOLDINGS. In addition to that, Urban Outfitters is 1.35 times more volatile than JINS HOLDINGS INC. It trades about -0.04 of its total potential returns per unit of risk. JINS HOLDINGS INC is currently generating about 0.06 per unit of volatility. If you would invest  3,807  in JINS HOLDINGS INC on December 19, 2024 and sell it today you would earn a total of  253.00  from holding JINS HOLDINGS INC or generate 6.65% return on investment over 90 days.

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

Urban Outfitters  vs.  JINS HOLDINGS INC

Urban Outfitters

Risk-Adjusted Performance

Very Weak

Over the last 90 days Urban Outfitters has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

JINS HOLDINGS INC

Risk-Adjusted Performance

Insignificant

Over the last 90 days JINS HOLDINGS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, JINS HOLDINGS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Urban Outfitters and JINS HOLDINGS

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

The idea behind Urban Outfitters and JINS HOLDINGS 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.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.