Correlation Between Driven Brands and Jacob Forward
Can any of the company-specific risk be diversified away by investing in both Driven Brands and Jacob Forward 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 Driven Brands and Jacob Forward into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Driven Brands Holdings and Jacob Forward ETF, you can compare the effects of market volatilities on Driven Brands and Jacob Forward 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 Driven Brands with a short position of Jacob Forward. Check out your portfolio center. Please also check ongoing floating volatility patterns of Driven Brands and Jacob Forward.
Diversification Opportunities for Driven Brands and Jacob Forward
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Driven and Jacob is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Driven Brands Holdings and Jacob Forward ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Forward ETF and Driven Brands 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 Driven Brands Holdings are associated (or correlated) with Jacob Forward. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Forward ETF has no effect on the direction of Driven Brands i.e., Driven Brands and Jacob Forward go up and down completely randomly.
Pair Corralation between Driven Brands and Jacob Forward
Given the investment horizon of 90 days Driven Brands Holdings is expected to generate 1.1 times more return on investment than Jacob Forward. However, Driven Brands is 1.1 times more volatile than Jacob Forward ETF. It trades about 0.15 of its potential returns per unit of risk. Jacob Forward ETF is currently generating about 0.1 per unit of risk. If you would invest 1,134 in Driven Brands Holdings on September 1, 2024 and sell it today you would earn a total of 551.00 from holding Driven Brands Holdings or generate 48.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Driven Brands Holdings vs. Jacob Forward ETF
Performance |
| Timeline |
| Driven Brands Holdings |
| Jacob Forward ETF |
Driven Brands and Jacob Forward Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Driven Brands and Jacob Forward
The main advantage of trading using opposite Driven Brands and Jacob Forward positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Driven Brands position performs unexpectedly, Jacob Forward 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 Jacob Forward will offset losses from the drop in Jacob Forward's long position.| Driven Brands vs. CarGurus | Driven Brands vs. KAR Auction Services | Driven Brands vs. Kingsway Financial Services | Driven Brands vs. Group 1 Automotive |
| Jacob Forward vs. iShares SP Mid Cap | Jacob Forward vs. iShares SP Small Cap | Jacob Forward vs. iShares SP Mid Cap | Jacob Forward vs. iShares SP 500 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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