Correlation Between Jacobs Solutions and CLST Holdings
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and CLST Holdings 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 CLST Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and CLST Holdings, you can compare the effects of market volatilities on Jacobs Solutions and CLST Holdings 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 CLST Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and CLST Holdings.
Diversification Opportunities for Jacobs Solutions and CLST Holdings
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jacobs and CLST is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and CLST Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLST Holdings 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 CLST Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLST Holdings has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and CLST Holdings go up and down completely randomly.
Pair Corralation between Jacobs Solutions and CLST Holdings
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 63.26 times less return on investment than CLST Holdings. But when comparing it to its historical volatility, Jacobs Solutions is 59.05 times less risky than CLST Holdings. It trades about 0.27 of its potential returns per unit of risk. CLST Holdings is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2.10 in CLST Holdings on October 25, 2024 and sell it today you would earn a total of 2.40 from holding CLST Holdings or generate 114.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. CLST Holdings
Performance |
| Timeline |
| Jacobs Solutions |
| CLST Holdings |
Jacobs Solutions and CLST Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and CLST Holdings
The main advantage of trading using opposite Jacobs Solutions and CLST Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, CLST Holdings 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 CLST Holdings will offset losses from the drop in CLST Holdings' long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| CLST Holdings vs. Ryanair Holdings PLC | CLST Holdings vs. Herc Holdings | CLST Holdings vs. Alta Equipment Group | CLST Holdings vs. PROG Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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