Correlation Between Zumiez and Jerash Holdings

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

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

Diversification Opportunities for Zumiez and Jerash Holdings

0.77

Correlation Coefficient

Zumiez  Jerash Holdings

Poor diversification

The 3 months correlation between Zumiez and Jerash is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Zumiez Inc and Jerash Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jerash Holdings and Zumiez 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 Zumiez Inc are associated (or correlated) with Jerash Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jerash Holdings has no effect on the direction of Zumiez i.e., Zumiez and Jerash Holdings go up and down completely randomly.

Pair Corralation between Zumiez and Jerash Holdings

Given the investment horizon of 90 days Zumiez Inc is expected to generate 1.79 times more return on investment than Jerash Holdings. However, Zumiez is 1.79 times more volatile than Jerash Holdings. It trades about 0.08 of its potential returns per unit of risk. Jerash Holdings is currently generating about 0.1 per unit of risk. If you would invest  1,166  in Zumiez Inc on May 6, 2025 and sell it today you would earn a total of  162.00  from holding Zumiez Inc or generate 13.89% return on investment over 90 days.

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

Zumiez Inc  vs.  Jerash Holdings

Zumiez Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zumiez Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, Zumiez showed solid returns over the last few months and may actually be approaching a breakup point.

Jerash Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jerash Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Jerash Holdings may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Zumiez and Jerash Holdings

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

The idea behind Zumiez Inc and Jerash Holdings 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.