Correlation Between Jacobs Solutions and GreenPro Capital

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

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

Diversification Opportunities for Jacobs Solutions and GreenPro Capital

-0.17

Correlation Coefficient

Jacobs Solutions  GreenPro Capital

Good diversification

The 3 months correlation between Jacobs and GreenPro is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and GreenPro Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenPro Capital Corp 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 GreenPro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenPro Capital Corp has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and GreenPro Capital go up and down completely randomly.

Pair Corralation between Jacobs Solutions and GreenPro Capital

Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 1.65 times less return on investment than GreenPro Capital. But when comparing it to its historical volatility, Jacobs Solutions is 4.98 times less risky than GreenPro Capital. It trades about 0.08 of its potential returns per unit of risk. GreenPro Capital Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  107.00  in GreenPro Capital Corp on September 20, 2024 and sell it today you would lose (6.00) from holding GreenPro Capital Corp or give up 5.61% 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.  GreenPro Capital Corp

Jacobs Solutions

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jacobs Solutions are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking indicators, Jacobs Solutions may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GreenPro Capital Corp

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GreenPro Capital Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, GreenPro Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jacobs Solutions and GreenPro Capital

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

The idea behind Jacobs Solutions and GreenPro Capital Corp 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.