Correlation Between Jacobs Solutions and First Advantage
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and First Advantage 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 First Advantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and First Advantage Corp, you can compare the effects of market volatilities on Jacobs Solutions and First Advantage 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 First Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and First Advantage.
Diversification Opportunities for Jacobs Solutions and First Advantage
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jacobs and First is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and First Advantage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Advantage 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 First Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Advantage Corp has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and First Advantage go up and down completely randomly.
Pair Corralation between Jacobs Solutions and First Advantage
Taking into account the 90-day investment horizon Jacobs Solutions is expected to under-perform the First Advantage. But the stock apears to be less risky and, when comparing its historical volatility, Jacobs Solutions is 1.27 times less risky than First Advantage. The stock trades about -0.01 of its potential returns per unit of risk. The First Advantage Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,788 in First Advantage Corp on August 30, 2024 and sell it today you would earn a total of 140.00 from holding First Advantage Corp or generate 7.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. First Advantage Corp
Performance |
| Timeline |
| Jacobs Solutions |
| First Advantage Corp |
Jacobs Solutions and First Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and First Advantage
The main advantage of trading using opposite Jacobs Solutions and First Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, First Advantage 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 First Advantage will offset losses from the drop in First Advantage's long position.| Jacobs Solutions vs. Dycom Industries | Jacobs Solutions vs. Innovate Corp | Jacobs Solutions vs. Energy Services | Jacobs Solutions vs. Wang Lee Group, |
| First Advantage vs. Manhattan Associates | First Advantage vs. Paycom Soft | First Advantage vs. Clearwater Analytics Holdings | First Advantage vs. Procore Technologies |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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