Correlation Between Duluth Holdings and JJill

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

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

Diversification Opportunities for Duluth Holdings and JJill

-0.42

Correlation Coefficient

Duluth Holdings  JJill

Very good diversification

The 3 months correlation between Duluth and JJill is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and Duluth Holdings 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 Duluth Holdings 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 Duluth Holdings i.e., Duluth Holdings and JJill go up and down completely randomly.

Pair Corralation between Duluth Holdings and JJill

Given the investment horizon of 90 days Duluth Holdings is expected to under-perform the JJill. But the stock apears to be less risky and, when comparing its historical volatility, Duluth Holdings is 1.05 times less risky than JJill. The stock trades about -0.02 of its potential returns per unit of risk. The JJill Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,369  in JJill Inc on August 26, 2024 and sell it today you would earn a total of  164.00  from holding JJill Inc or generate 6.92% return on investment over 90 days.

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

Duluth Holdings  vs.  JJill Inc

Duluth Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Duluth Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Duluth Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

JJill Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JJill Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Duluth Holdings and JJill

The main advantage of trading using opposite Duluth Holdings and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duluth Holdings 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 Duluth Holdings 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.