Correlation Between Jacobs Solutions and DLH Holdings
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and DLH 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 DLH 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 DLH Holdings Corp, you can compare the effects of market volatilities on Jacobs Solutions and DLH 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 DLH Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and DLH Holdings.
Diversification Opportunities for Jacobs Solutions and DLH Holdings
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jacobs and DLH is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and DLH Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DLH Holdings Corp 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 DLH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DLH Holdings Corp has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and DLH Holdings go up and down completely randomly.
Pair Corralation between Jacobs Solutions and DLH Holdings
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 0.67 times more return on investment than DLH Holdings. However, Jacobs Solutions is 1.49 times less risky than DLH Holdings. It trades about 0.1 of its potential returns per unit of risk. DLH Holdings Corp is currently generating about -0.08 per unit of risk. If you would invest 12,839 in Jacobs Solutions on August 26, 2024 and sell it today you would earn a total of 897.00 from holding Jacobs Solutions or generate 6.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. DLH Holdings Corp
Performance |
| Timeline |
| Jacobs Solutions |
| DLH Holdings Corp |
Jacobs Solutions and DLH Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and DLH Holdings
The main advantage of trading using opposite Jacobs Solutions and DLH Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, DLH 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 DLH Holdings will offset losses from the drop in DLH Holdings' long position.| Jacobs Solutions vs. Innovate Corp | Jacobs Solutions vs. Energy Services | Jacobs Solutions vs. Api Group Corp | Jacobs Solutions vs. Topbuild Corp |
| DLH Holdings vs. ExlService Holdings | DLH Holdings vs. WNS Holdings | DLH Holdings vs. Gartner | DLH Holdings vs. The Hackett Group |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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