Correlation Between Advanced Micro and Jacobs Solutions
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and Jacobs Solutions 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 Advanced Micro and Jacobs Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Jacobs Solutions, you can compare the effects of market volatilities on Advanced Micro and Jacobs Solutions 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 Advanced Micro with a short position of Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Jacobs Solutions.
Diversification Opportunities for Advanced Micro and Jacobs Solutions
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Advanced and Jacobs is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with Jacobs Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacobs Solutions has no effect on the direction of Advanced Micro i.e., Advanced Micro and Jacobs Solutions go up and down completely randomly.
Pair Corralation between Advanced Micro and Jacobs Solutions
Considering the 90-day investment horizon Advanced Micro Devices is expected to under-perform the Jacobs Solutions. In addition to that, Advanced Micro is 1.31 times more volatile than Jacobs Solutions. It trades about -0.29 of its total potential returns per unit of risk. Jacobs Solutions is currently generating about -0.01 per unit of volatility. If you would invest 14,283 in Jacobs Solutions on August 30, 2024 and sell it today you would lose (162.00) from holding Jacobs Solutions or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Advanced Micro Devices vs. Jacobs Solutions
Performance |
| Timeline |
| Advanced Micro Devices |
| Jacobs Solutions |
Advanced Micro and Jacobs Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Jacobs Solutions
The main advantage of trading using opposite Advanced Micro and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, Jacobs Solutions 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 Jacobs Solutions will offset losses from the drop in Jacobs Solutions' long position.| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
| Jacobs Solutions vs. Dycom Industries | Jacobs Solutions vs. Innovate Corp | Jacobs Solutions vs. Energy Services | Jacobs Solutions vs. Wang Lee Group, |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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