Correlation Between Bowman Consulting and JGC Corp
Can any of the company-specific risk be diversified away by investing in both Bowman Consulting and JGC Corp 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 JGC Corp 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 JGC Corp, you can compare the effects of market volatilities on Bowman Consulting and JGC Corp 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 JGC Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowman Consulting and JGC Corp.
Diversification Opportunities for Bowman Consulting and JGC Corp
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bowman and JGC is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bowman Consulting Group and JGC Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JGC Corp 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 JGC Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JGC Corp has no effect on the direction of Bowman Consulting i.e., Bowman Consulting and JGC Corp go up and down completely randomly.
Pair Corralation between Bowman Consulting and JGC Corp
Given the investment horizon of 90 days Bowman Consulting is expected to generate 7.24 times less return on investment than JGC Corp. In addition to that, Bowman Consulting is 1.08 times more volatile than JGC Corp. It trades about 0.02 of its total potential returns per unit of risk. JGC Corp is currently generating about 0.17 per unit of volatility. If you would invest 1,535 in JGC Corp on November 5, 2024 and sell it today you would earn a total of 100.00 from holding JGC Corp or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Bowman Consulting Group vs. JGC Corp
Performance |
| Timeline |
| Bowman Consulting |
| JGC Corp |
Bowman Consulting and JGC Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowman Consulting and JGC Corp
The main advantage of trading using opposite Bowman Consulting and JGC Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowman Consulting position performs unexpectedly, JGC Corp 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 JGC Corp will offset losses from the drop in JGC Corp's long position.| Bowman Consulting vs. EMCOR Group | Bowman Consulting vs. Comfort Systems USA | Bowman Consulting vs. Primoris Services | Bowman Consulting vs. Granite Construction Incorporated |
| JGC Corp vs. Bilfinger SE ADR | JGC Corp vs. ACS Actividades De | JGC Corp vs. Acciona SA | JGC Corp vs. ACS Actividades de |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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