Correlation Between Lands End and JJill

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

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

Diversification Opportunities for Lands End and JJill

-0.2

Correlation Coefficient

Lands End  JJill

Good diversification

The 3 months correlation between Lands and JJill is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lands End and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and Lands End 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 Lands End 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 Lands End i.e., Lands End and JJill go up and down completely randomly.

Pair Corralation between Lands End and JJill

Allowing for the 90-day total investment horizon Lands End is expected to generate 1.05 times more return on investment than JJill. However, Lands End is 1.05 times more volatile than JJill Inc. It trades about 0.03 of its potential returns per unit of risk. JJill Inc is currently generating about -0.04 per unit of risk. If you would invest  1,394  in Lands End on August 24, 2024 and sell it today you would earn a total of  101.00  from holding Lands End or generate 7.25% return on investment over 90 days.

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

Lands End  vs.  JJill Inc

Lands End

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lands End has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Lands End is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 Lands End and JJill

The main advantage of trading using opposite Lands End and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lands End 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 Lands End 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.