Correlation Between Bowman Consulting and Jacobs Solutions
Can any of the company-specific risk be diversified away by investing in both Bowman Consulting 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 Bowman Consulting and Jacobs Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bowman Consulting Group and Jacobs Solutions, you can compare the effects of market volatilities on Bowman Consulting 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 Bowman Consulting with a short position of Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowman Consulting and Jacobs Solutions.
Diversification Opportunities for Bowman Consulting and Jacobs Solutions
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bowman and Jacobs is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bowman Consulting Group and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions and Bowman Consulting 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 Bowman Consulting Group 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 Bowman Consulting i.e., Bowman Consulting and Jacobs Solutions go up and down completely randomly.
Pair Corralation between Bowman Consulting and Jacobs Solutions
Given the investment horizon of 90 days Bowman Consulting Group is expected to generate 1.03 times more return on investment than Jacobs Solutions. However, Bowman Consulting is 1.03 times more volatile than Jacobs Solutions. It trades about 0.52 of its potential returns per unit of risk. Jacobs Solutions is currently generating about 0.04 per unit of risk. If you would invest 2,158 in Bowman Consulting Group on September 2, 2024 and sell it today you would earn a total of 581.00 from holding Bowman Consulting Group or generate 26.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bowman Consulting Group vs. Jacobs Solutions
Performance |
| Timeline |
| Bowman Consulting |
| Jacobs Solutions |
Bowman Consulting and Jacobs Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowman Consulting and Jacobs Solutions
The main advantage of trading using opposite Bowman Consulting and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowman Consulting 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.| Bowman Consulting vs. EMCOR Group | Bowman Consulting vs. Comfort Systems USA | Bowman Consulting vs. Primoris Services | Bowman Consulting vs. Granite Construction Incorporated |
| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
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.
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