Correlation Between Jacobs Solutions and Genfit
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Genfit 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 Genfit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Genfit, you can compare the effects of market volatilities on Jacobs Solutions and Genfit 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 Genfit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Genfit.
Diversification Opportunities for Jacobs Solutions and Genfit
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jacobs and Genfit is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit 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 Genfit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Genfit go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Genfit
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 0.36 times more return on investment than Genfit. However, Jacobs Solutions is 2.81 times less risky than Genfit. It trades about 0.15 of its potential returns per unit of risk. Genfit is currently generating about 0.04 per unit of risk. If you would invest 12,261 in Jacobs Solutions on August 31, 2024 and sell it today you would earn a total of 1,860 from holding Jacobs Solutions or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. Genfit
Performance |
| Timeline |
| Jacobs Solutions |
| Genfit |
Jacobs Solutions and Genfit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Genfit
The main advantage of trading using opposite Jacobs Solutions and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Genfit 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 Genfit will offset losses from the drop in Genfit's long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| Genfit vs. Eliem Therapeutics | Genfit vs. HCW Biologics | Genfit vs. Molecular Partners AG | Genfit vs. MediciNova |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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