Correlation Between China Foods and Jacobs Solutions
Can any of the company-specific risk be diversified away by investing in both China Foods and Jacobs Solutions 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 China Foods and Jacobs Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Foods Limited and Jacobs Solutions, you can compare the effects of market volatilities on China Foods and Jacobs Solutions 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 China Foods with a short position of Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Foods and Jacobs Solutions.
Diversification Opportunities for China Foods and Jacobs Solutions
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Jacobs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Foods Limited and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions and China Foods 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 China Foods Limited are associated (or correlated) with Jacobs Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacobs Solutions has no effect on the direction of China Foods i.e., China Foods and Jacobs Solutions go up and down completely randomly.
Pair Corralation between China Foods and Jacobs Solutions
If you would invest 10,617 in Jacobs Solutions on September 4, 2024 and sell it today you would earn a total of 3,183 from holding Jacobs Solutions or generate 29.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 89.88% |
| Values | Daily Returns |
China Foods Limited vs. Jacobs Solutions
Performance |
| Timeline |
| China Foods Limited |
| Jacobs Solutions |
China Foods and Jacobs Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Foods and Jacobs Solutions
The main advantage of trading using opposite China Foods and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Foods position performs unexpectedly, Jacobs Solutions 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 Jacobs Solutions will offset losses from the drop in Jacobs Solutions' long position.| China Foods vs. CECO Environmental Corp | China Foods vs. Highway Holdings Limited | China Foods vs. Papaya Growth Opportunity | China Foods vs. Bausch Lomb Corp |
| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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