Correlation Between Bon-Ton Stores and JC Penney
Can any of the company-specific risk be diversified away by investing in both Bon-Ton Stores and JC Penney 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 Bon-Ton Stores and JC Penney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Bon Ton Stores and J C Penney, you can compare the effects of market volatilities on Bon-Ton Stores and JC Penney 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 Bon-Ton Stores with a short position of JC Penney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bon-Ton Stores and JC Penney.
Diversification Opportunities for Bon-Ton Stores and JC Penney
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bon-Ton and JCP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Bon Ton Stores and J C Penney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J C Penney and Bon-Ton Stores 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 The Bon Ton Stores are associated (or correlated) with JC Penney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J C Penney has no effect on the direction of Bon-Ton Stores i.e., Bon-Ton Stores and JC Penney go up and down completely randomly.
Pair Corralation between Bon-Ton Stores and JC Penney
If you would invest (100.00) in J C Penney on January 26, 2024 and sell it today you would earn a total of 100.00 from holding J C Penney or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Bon Ton Stores vs. J C Penney
Performance |
| Timeline |
| Bon-Ton Stores |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| J C Penney |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bon-Ton Stores and JC Penney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bon-Ton Stores and JC Penney
The main advantage of trading using opposite Bon-Ton Stores and JC Penney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bon-Ton Stores position performs unexpectedly, JC Penney 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 JC Penney will offset losses from the drop in JC Penney's long position.| Bon-Ton Stores vs. Discover Financial Services | Bon-Ton Stores vs. Upper Street Marketing | Bon-Ton Stores vs. KeyCorp | Bon-Ton Stores vs. Encore Capital Group |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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