Correlation Between Energy Services and Jacobs Solutions
Can any of the company-specific risk be diversified away by investing in both Energy Services 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 Energy Services and Jacobs Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Services and Jacobs Solutions, you can compare the effects of market volatilities on Energy Services 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 Energy Services with a short position of Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Services and Jacobs Solutions.
Diversification Opportunities for Energy Services and Jacobs Solutions
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Energy and Jacobs is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Energy Services and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions and Energy Services 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 Energy Services 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 Energy Services i.e., Energy Services and Jacobs Solutions go up and down completely randomly.
Pair Corralation between Energy Services and Jacobs Solutions
Given the investment horizon of 90 days Energy Services is expected to generate 1.45 times more return on investment than Jacobs Solutions. However, Energy Services is 1.45 times more volatile than Jacobs Solutions. It trades about 0.58 of its potential returns per unit of risk. Jacobs Solutions is currently generating about -0.08 per unit of risk. If you would invest 1,024 in Energy Services on August 24, 2024 and sell it today you would earn a total of 482.00 from holding Energy Services or generate 47.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Services vs. Jacobs Solutions
Performance |
| Timeline |
| Energy Services |
| Jacobs Solutions |
Energy Services and Jacobs Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Services and Jacobs Solutions
The main advantage of trading using opposite Energy Services and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Services 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.| Energy Services vs. NV5 Global | Energy Services vs. Matrix Service Co | Energy Services vs. MYR Group | Energy Services vs. Comfort Systems USA |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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