Correlation Between Jacobs Solutions and Stantec

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

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

Diversification Opportunities for Jacobs Solutions and Stantec

0.77

Correlation Coefficient

Jacobs Solutions  Stantec

Poor diversification

The 3 months correlation between Jacobs and Stantec is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Stantec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stantec 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 Stantec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stantec has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Stantec go up and down completely randomly.

Pair Corralation between Jacobs Solutions and Stantec

Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 1.55 times less return on investment than Stantec. In addition to that, Jacobs Solutions is 1.33 times more volatile than Stantec. It trades about 0.12 of its total potential returns per unit of risk. Stantec is currently generating about 0.25 per unit of volatility. If you would invest  9,155  in Stantec on May 5, 2025 and sell it today you would earn a total of  1,711  from holding Stantec or generate 18.69% return on investment over 90 days.

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

Jacobs Solutions  vs.  Stantec

Jacobs Solutions

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jacobs Solutions are ranked lower than 9 (%) 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 September 2025.

Stantec

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stantec are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Stantec displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jacobs Solutions and Stantec

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

The idea behind Jacobs Solutions and Stantec 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.