Correlation Between Jacobs Solutions and Neogen
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Neogen 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 Neogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Neogen, you can compare the effects of market volatilities on Jacobs Solutions and Neogen 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 Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Neogen.
Diversification Opportunities for Jacobs Solutions and Neogen
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jacobs and Neogen is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Neogen go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Neogen
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 0.7 times more return on investment than Neogen. However, Jacobs Solutions is 1.42 times less risky than Neogen. It trades about 0.02 of its potential returns per unit of risk. Neogen is currently generating about 0.0 per unit of risk. If you would invest 14,058 in Jacobs Solutions on September 1, 2024 and sell it today you would earn a total of 65.00 from holding Jacobs Solutions or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. Neogen
Performance |
| Timeline |
| Jacobs Solutions |
| Neogen |
Jacobs Solutions and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Neogen
The main advantage of trading using opposite Jacobs Solutions and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen's long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| Neogen vs. Qiagen NV | Neogen vs. Aclaris Therapeutics | Neogen vs. IQVIA Holdings | Neogen vs. Medpace Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
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| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |