Correlation Between Jacobs Solutions and Cimpress

Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Cimpress 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 Cimpress into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jacobs Solutions and Cimpress NV, you can compare the effects of market volatilities on Jacobs Solutions and Cimpress 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 Cimpress. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Cimpress.

Diversification Opportunities for Jacobs Solutions and Cimpress

0.66

Correlation Coefficient

Jacobs Solutions  Cimpress

Poor diversification

The 3 months correlation between Jacobs and Cimpress is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV 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 Cimpress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimpress NV has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Cimpress go up and down completely randomly.

Pair Corralation between Jacobs Solutions and Cimpress

Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 0.39 times more return on investment than Cimpress. However, Jacobs Solutions is 2.58 times less risky than Cimpress. It trades about -0.16 of its potential returns per unit of risk. Cimpress NV is currently generating about -0.29 per unit of risk. If you would invest  14,086  in Jacobs Solutions on November 27, 2024 and sell it today you would lose (1,374) from holding Jacobs Solutions or give up 9.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Jacobs Solutions  vs.  Cimpress NV

Jacobs Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jacobs Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's forward-looking indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Cimpress NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cimpress NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Jacobs Solutions and Cimpress

The main advantage of trading using opposite Jacobs Solutions and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Cimpress 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 Cimpress will offset losses from the drop in Cimpress' long position.

The idea behind Jacobs Solutions and Cimpress NV 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.