Correlation Between JJill and Hibbett Sports

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

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

Diversification Opportunities for JJill and Hibbett Sports

-0.35

Correlation Coefficient

JJill  Hibbett Sports

Very good diversification

The @@bw1eo months correlation between JJill and Hibbett is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc and Hibbett Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hibbett Sports and JJill 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 JJill Inc are associated (or correlated) with Hibbett Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hibbett Sports has no effect on the direction of JJill i.e., JJill and Hibbett Sports go up and down completely randomly.

Pair Corralation between JJill and Hibbett Sports

Given the investment horizon of 90 days JJill is expected to generate 1.57 times less return on investment than Hibbett Sports. But when comparing it to its historical volatility, JJill Inc is 1.25 times less risky than Hibbett Sports. It trades about 0.05 of its potential returns per unit of risk. Hibbett Sports is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  4,377  in Hibbett Sports on February 4, 2024 and sell it today you would earn a total of  4,282  from holding Hibbett Sports or generate 97.83% return on investment over 90 days.

Time Period	@@bw1EO Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

JJill Inc  vs.  Hibbett Sports

JJill Inc

Risk-Adjusted Performance

0 of 100

Modest

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 June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Hibbett Sports

Risk-Adjusted Performance

19 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hibbett Sports are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental drivers, Hibbett Sports sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JJill and Hibbett Sports

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

The idea behind JJill Inc and Hibbett Sports 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.