Correlation Between Jacobs Solutions and Canada Goose

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

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

Diversification Opportunities for Jacobs Solutions and Canada Goose

-0.28

Correlation Coefficient

Jacobs Solutions  Canada Goose

Very good diversification

The 3 months correlation between Jacobs and Canada is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Canada Goose Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Goose Holdings 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 Canada Goose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Goose Holdings has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Canada Goose go up and down completely randomly.

Pair Corralation between Jacobs Solutions and Canada Goose

Taking into account the 90-day investment horizon Jacobs Solutions is expected to under-perform the Canada Goose. But the stock apears to be less risky and, when comparing its historical volatility, Jacobs Solutions is 1.0 times less risky than Canada Goose. The stock trades about -0.23 of its potential returns per unit of risk. The Canada Goose Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  966.00  in Canada Goose Holdings on September 14, 2024 and sell it today you would earn a total of  34.00  from holding Canada Goose Holdings or generate 3.52% return on investment over 90 days.

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

Jacobs Solutions  vs.  Canada Goose Holdings

Jacobs Solutions

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jacobs Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking indicators, Jacobs Solutions revealed solid returns over the last few months and may actually be approaching a breakup point.

Canada Goose Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canada Goose Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Canada Goose is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Jacobs Solutions and Canada Goose

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

The idea behind Jacobs Solutions and Canada Goose Holdings 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.