Correlation Between Espey Mfg and JJill

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Espey Mfg 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 Espey Mfg and JJill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Espey Mfg Electronics and JJill Inc, you can compare the effects of market volatilities on Espey Mfg 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 Espey Mfg with a short position of JJill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Espey Mfg and JJill.

Diversification Opportunities for Espey Mfg and JJill

0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between Espey and JJill is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Espey Mfg Electronics and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc and Espey Mfg 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 Espey Mfg Electronics 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 Espey Mfg i.e., Espey Mfg and JJill go up and down completely randomly.

Pair Corralation between Espey Mfg and JJill

Considering the 90-day investment horizon Espey Mfg is expected to generate 21.6 times less return on investment than JJill. But when comparing it to its historical volatility, Espey Mfg Electronics is 3.25 times less risky than JJill. It trades about 0.05 of its potential returns per unit of risk. JJill Inc is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  2,521  in JJill Inc on December 30, 2023 and sell it today you would earn a total of  676.00  from holding JJill Inc or generate 26.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Espey Mfg Electronics  vs.  JJill Inc

 Performance 
       Timeline  
Espey Mfg Electronics 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Espey Mfg Electronics are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Espey Mfg reported solid returns over the last few months and may actually be approaching a breakup point.
JJill Inc 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, JJill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Espey Mfg and JJill Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Espey Mfg and JJill

The main advantage of trading using opposite Espey Mfg and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Espey Mfg 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 Espey Mfg Electronics 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.
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk