Correlation Between Jacobs Solutions and Gap,
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Gap, 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 Gap, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and The Gap,, you can compare the effects of market volatilities on Jacobs Solutions and Gap, 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 Gap,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Gap,.
Diversification Opportunities for Jacobs Solutions and Gap,
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jacobs and Gap, is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, 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 Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Gap, go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Gap,
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 1.09 times less return on investment than Gap,. But when comparing it to its historical volatility, Jacobs Solutions is 2.58 times less risky than Gap,. It trades about 0.09 of its potential returns per unit of risk. The Gap, is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,134 in The Gap, on September 4, 2024 and sell it today you would earn a total of 447.00 from holding The Gap, or generate 20.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. The Gap,
Performance |
| Timeline |
| Jacobs Solutions |
| Gap, |
Jacobs Solutions and Gap, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Gap,
The main advantage of trading using opposite Jacobs Solutions and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Gap, 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 Gap, will offset losses from the drop in Gap,'s long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| Gap, vs. Merit Medical Systems | Gap, vs. Postal Realty Trust | Gap, vs. Cumberland Pharmaceuticals | Gap, vs. RBC Bearings Incorporated |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |