Correlation Between Jacobs Solutions and Brinks
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Brinks 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 Jacobs Solutions and Brinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Brinks Company, you can compare the effects of market volatilities on Jacobs Solutions and Brinks 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 Jacobs Solutions with a short position of Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Brinks.
Diversification Opportunities for Jacobs Solutions and Brinks
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jacobs and Brinks is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Brinks Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks Company and Jacobs Solutions 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 Jacobs Solutions are associated (or correlated) with Brinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinks Company has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Brinks go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Brinks
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 1.32 times more return on investment than Brinks. However, Jacobs Solutions is 1.32 times more volatile than Brinks Company. It trades about -0.02 of its potential returns per unit of risk. Brinks Company is currently generating about -0.12 per unit of risk. If you would invest 14,120 in Jacobs Solutions on August 28, 2024 and sell it today you would lose (190.00) from holding Jacobs Solutions or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. Brinks Company
Performance |
| Timeline |
| Jacobs Solutions |
| Brinks Company |
Jacobs Solutions and Brinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Brinks
The main advantage of trading using opposite Jacobs Solutions and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Brinks 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 Brinks will offset losses from the drop in Brinks' long position.| Jacobs Solutions vs. Innovate Corp | Jacobs Solutions vs. Energy Services | Jacobs Solutions vs. Api Group Corp | Jacobs Solutions vs. Topbuild Corp |
| Brinks vs. Park Electrochemical | Brinks vs. Innovative Solutions and | Brinks vs. Curtiss Wright | Brinks vs. National Presto Industries |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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