Correlation Between JC Penney and Dillards
Can any of the company-specific risk be diversified away by investing in both JC Penney and Dillards 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 JC Penney and Dillards into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J C Penney and Dillards, you can compare the effects of market volatilities on JC Penney and Dillards 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 JC Penney with a short position of Dillards. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Penney and Dillards.
Diversification Opportunities for JC Penney and Dillards
Pay attention - limited upside
The 3 months correlation between JCP and Dillards is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding J C Penney and Dillards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dillards and JC Penney 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 J C Penney are associated (or correlated) with Dillards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dillards has no effect on the direction of JC Penney i.e., JC Penney and Dillards go up and down completely randomly.
Pair Corralation between JC Penney and Dillards
If you would invest 44,102 in Dillards on January 24, 2024 and sell it today you would earn a total of 308.00 from holding Dillards or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
J C Penney vs. Dillards
Performance |
| Timeline |
| J C Penney |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Dillards |
JC Penney and Dillards Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JC Penney and Dillards
The main advantage of trading using opposite JC Penney and Dillards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Penney position performs unexpectedly, Dillards 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 Dillards will offset losses from the drop in Dillards' long position.| JC Penney vs. CF Industries Holdings | JC Penney vs. Usio Inc | JC Penney vs. Hudson Technologies | JC Penney vs. BioNTech SE |
| Dillards vs. Marks Spencer Group | Dillards vs. Marks and Spencer | Dillards vs. Dillards Capital Trust | Dillards vs. Companhia Brasileira de |
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.
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