Correlation Between Jacobs Solutions and Lakeside Holding
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Lakeside Holding 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 Lakeside Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Lakeside Holding Limited, you can compare the effects of market volatilities on Jacobs Solutions and Lakeside Holding 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 Lakeside Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Lakeside Holding.
Diversification Opportunities for Jacobs Solutions and Lakeside Holding
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jacobs and Lakeside is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Lakeside Holding Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeside Holding 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 Lakeside Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeside Holding has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Lakeside Holding go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Lakeside Holding
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 1.35 times less return on investment than Lakeside Holding. But when comparing it to its historical volatility, Jacobs Solutions is 6.89 times less risky than Lakeside Holding. It trades about 0.14 of its potential returns per unit of risk. Lakeside Holding Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 300.00 in Lakeside Holding Limited on September 12, 2024 and sell it today you would lose (38.00) from holding Lakeside Holding Limited or give up 12.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. Lakeside Holding Limited
Performance |
| Timeline |
| Jacobs Solutions |
| Lakeside Holding |
Jacobs Solutions and Lakeside Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Lakeside Holding
The main advantage of trading using opposite Jacobs Solutions and Lakeside Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Lakeside Holding 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 Lakeside Holding will offset losses from the drop in Lakeside Holding's long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| Lakeside Holding vs. MGIC Investment Corp | Lakeside Holding vs. CapitaLand Investment Limited | Lakeside Holding vs. Fidus Investment Corp | Lakeside Holding vs. Guangdong Investment Limited |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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