Correlation Between SNDL and Jacobs Solutions
Can any of the company-specific risk be diversified away by investing in both SNDL and Jacobs Solutions 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 SNDL and Jacobs Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and Jacobs Solutions, you can compare the effects of market volatilities on SNDL and Jacobs Solutions 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 SNDL with a short position of Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Jacobs Solutions.
Diversification Opportunities for SNDL and Jacobs Solutions
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SNDL and Jacobs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions and SNDL 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 SNDL Inc are associated (or correlated) with Jacobs Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacobs Solutions has no effect on the direction of SNDL i.e., SNDL and Jacobs Solutions go up and down completely randomly.
Pair Corralation between SNDL and Jacobs Solutions
Given the investment horizon of 90 days SNDL Inc is expected to under-perform the Jacobs Solutions. In addition to that, SNDL is 1.95 times more volatile than Jacobs Solutions. It trades about -0.11 of its total potential returns per unit of risk. Jacobs Solutions is currently generating about -0.01 per unit of volatility. If you would invest 14,283 in Jacobs Solutions on August 30, 2024 and sell it today you would lose (162.00) from holding Jacobs Solutions or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNDL Inc vs. Jacobs Solutions
Performance |
| Timeline |
| SNDL Inc |
| Jacobs Solutions |
SNDL and Jacobs Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and Jacobs Solutions
The main advantage of trading using opposite SNDL and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, Jacobs Solutions 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 Jacobs Solutions will offset losses from the drop in Jacobs Solutions' long position.The idea behind SNDL Inc and Jacobs Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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