Correlation Between Jacobs Solutions and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Barrick Gold 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 Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Barrick Gold Corp, you can compare the effects of market volatilities on Jacobs Solutions and Barrick Gold 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 Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Barrick Gold.
Diversification Opportunities for Jacobs Solutions and Barrick Gold
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jacobs and Barrick is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp 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 Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Barrick Gold go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Barrick Gold
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 1.13 times more return on investment than Barrick Gold. However, Jacobs Solutions is 1.13 times more volatile than Barrick Gold Corp. It trades about 0.03 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about -0.19 per unit of risk. If you would invest 13,984 in Jacobs Solutions on September 3, 2024 and sell it today you would earn a total of 139.00 from holding Jacobs Solutions or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. Barrick Gold Corp
Performance |
| Timeline |
| Jacobs Solutions |
| Barrick Gold Corp |
Jacobs Solutions and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Barrick Gold
The main advantage of trading using opposite Jacobs Solutions and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Gold Fields Ltd | Barrick Gold vs. Franco Nevada | Barrick Gold vs. Sandstorm Gold Ltd |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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