Correlation Between AMCON Distributing and Jacobs Solutions
Can any of the company-specific risk be diversified away by investing in both AMCON Distributing 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 AMCON Distributing and Jacobs Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMCON Distributing and Jacobs Solutions, you can compare the effects of market volatilities on AMCON Distributing 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 AMCON Distributing with a short position of Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMCON Distributing and Jacobs Solutions.
Diversification Opportunities for AMCON Distributing and Jacobs Solutions
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMCON and Jacobs is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions and AMCON Distributing 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 AMCON Distributing 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 AMCON Distributing i.e., AMCON Distributing and Jacobs Solutions go up and down completely randomly.
Pair Corralation between AMCON Distributing and Jacobs Solutions
Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the Jacobs Solutions. In addition to that, AMCON Distributing is 3.44 times more volatile than Jacobs Solutions. It trades about -0.14 of its total potential returns per unit of risk. Jacobs Solutions is currently generating about -0.2 per unit of volatility. If you would invest 13,699 in Jacobs Solutions on October 14, 2024 and sell it today you would lose (464.00) from holding Jacobs Solutions or give up 3.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMCON Distributing vs. Jacobs Solutions
Performance |
| Timeline |
| AMCON Distributing |
| Jacobs Solutions |
AMCON Distributing and Jacobs Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMCON Distributing and Jacobs Solutions
The main advantage of trading using opposite AMCON Distributing and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing 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.| AMCON Distributing vs. The Chefs Warehouse | AMCON Distributing vs. G Willi Food International | AMCON Distributing vs. SpartanNash Co | AMCON Distributing vs. Calavo Growers |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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