Correlation Between 83001AAC6 and JJill

Can any of the company-specific risk be diversified away by investing in both 83001AAC6 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 83001AAC6 and JJill into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Six Flags Entertainment and JJill Inc, you can compare the effects of market volatilities on 83001AAC6 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 83001AAC6 with a short position of JJill. Check out your portfolio center. Please also check ongoing floating volatility patterns of 83001AAC6 and JJill.

Diversification Opportunities for 83001AAC6 and JJill

-0.37

Correlation Coefficient

83001AAC6  JJill

Very good diversification

The 3 months correlation between 83001AAC6 and JJill is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and 83001AAC6 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 Six Flags Entertainment 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 83001AAC6 i.e., 83001AAC6 and JJill go up and down completely randomly.

Pair Corralation between 83001AAC6 and JJill

Assuming the 90 days trading horizon 83001AAC6 is expected to generate 5.3 times less return on investment than JJill. But when comparing it to its historical volatility, Six Flags Entertainment is 6.29 times less risky than JJill. It trades about 0.02 of its potential returns per unit of risk. JJill Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,519  in JJill Inc on September 21, 2024 and sell it today you would earn a total of  49.00  from holding JJill Inc or generate 1.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.85%
Values	Daily Returns

Six Flags Entertainment  vs.  JJill Inc

Six Flags Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Six Flags Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 83001AAC6 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

JJill Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, JJill is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with 83001AAC6 and JJill

The main advantage of trading using opposite 83001AAC6 and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 83001AAC6 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 Six Flags Entertainment 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.