Correlation Between Espey Mfg and JJill
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
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Espey Mfg Electronics vs. JJill Inc
Performance |
Timeline |
Espey Mfg Electronics |
JJill Inc |
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.Espey Mfg vs. Bloom Energy Corp | Espey Mfg vs. ADS TEC ENERGY PLC | Espey Mfg vs. Microvast Holdings | Espey Mfg vs. Noco noco Ordinary Share |
JJill vs. J Long Group Limited | JJill vs. Duluth Holdings | JJill vs. Destination XL Group | JJill vs. Victorias Secret Co |
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.
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