Correlation Between Jacobs Solutions and National Vision
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and National Vision 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 National Vision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and National Vision Holdings, you can compare the effects of market volatilities on Jacobs Solutions and National Vision 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 National Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and National Vision.
Diversification Opportunities for Jacobs Solutions and National Vision
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jacobs and National is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and National Vision Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Vision Holdings 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 National Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Vision Holdings has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and National Vision go up and down completely randomly.
Pair Corralation between Jacobs Solutions and National Vision
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 6.28 times less return on investment than National Vision. But when comparing it to its historical volatility, Jacobs Solutions is 1.26 times less risky than National Vision. It trades about 0.04 of its potential returns per unit of risk. National Vision Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,101 in National Vision Holdings on September 2, 2024 and sell it today you would earn a total of 109.00 from holding National Vision Holdings or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. National Vision Holdings
Performance |
| Timeline |
| Jacobs Solutions |
| National Vision Holdings |
Jacobs Solutions and National Vision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and National Vision
The main advantage of trading using opposite Jacobs Solutions and National Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, National Vision 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 National Vision will offset losses from the drop in National Vision's long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |