Correlation Between Jacobs Solutions and Veea

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

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

Diversification Opportunities for Jacobs Solutions and Veea

-0.35

Correlation Coefficient

Jacobs Solutions  Veea

Very good diversification

The 3 months correlation between Jacobs and Veea is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc 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 Veea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veea Inc has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Veea go up and down completely randomly.

Pair Corralation between Jacobs Solutions and Veea

Taking into account the 90-day investment horizon Jacobs Solutions is expected to under-perform the Veea. But the stock apears to be less risky and, when comparing its historical volatility, Jacobs Solutions is 8.33 times less risky than Veea. The stock trades about -0.17 of its potential returns per unit of risk. The Veea Inc is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  261.00  in Veea Inc on October 4, 2024 and sell it today you would earn a total of  117.00  from holding Veea Inc or generate 44.83% 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.  Veea Inc

Jacobs Solutions

Risk-Adjusted Performance

0 of 100

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 relatively steady forward-looking indicators, Jacobs Solutions is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Veea Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veea Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Jacobs Solutions and Veea

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

The idea behind Jacobs Solutions and Veea Inc 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.