Correlation Between Jacobs Solutions and Air Lease
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Air Lease 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 Jacobs Solutions and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Air Lease, you can compare the effects of market volatilities on Jacobs Solutions and Air Lease 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 Jacobs Solutions with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Air Lease.
Diversification Opportunities for Jacobs Solutions and Air Lease
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jacobs and Air is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and Jacobs Solutions 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 Jacobs Solutions are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Air Lease go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Air Lease
Taking into account the 90-day investment horizon Jacobs Solutions is expected to under-perform the Air Lease. In addition to that, Jacobs Solutions is 1.19 times more volatile than Air Lease. It trades about -0.02 of its total potential returns per unit of risk. Air Lease is currently generating about 0.39 per unit of volatility. If you would invest 4,497 in Air Lease on August 28, 2024 and sell it today you would earn a total of 719.00 from holding Air Lease or generate 15.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. Air Lease
Performance |
| Timeline |
| Jacobs Solutions |
| Air Lease |
Jacobs Solutions and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Air Lease
The main advantage of trading using opposite Jacobs Solutions and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| Jacobs Solutions vs. Innovate Corp | Jacobs Solutions vs. Energy Services | Jacobs Solutions vs. Api Group Corp | Jacobs Solutions vs. Topbuild Corp |
| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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