Correlation Between Jacobs Solutions and Comfort Systems
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Comfort Systems 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 Comfort Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Comfort Systems USA, you can compare the effects of market volatilities on Jacobs Solutions and Comfort Systems 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 Comfort Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Comfort Systems.
Diversification Opportunities for Jacobs Solutions and Comfort Systems
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jacobs and Comfort is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Comfort Systems USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comfort Systems USA 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 Comfort Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comfort Systems USA has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Comfort Systems go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Comfort Systems
Taking into account the 90-day investment horizon Jacobs Solutions is expected to under-perform the Comfort Systems. But the stock apears to be less risky and, when comparing its historical volatility, Jacobs Solutions is 3.51 times less risky than Comfort Systems. The stock trades about -0.11 of its potential returns per unit of risk. The Comfort Systems USA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 45,100 in Comfort Systems USA on November 18, 2024 and sell it today you would lose (5,978) from holding Comfort Systems USA or give up 13.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. Comfort Systems USA
Performance |
| Timeline |
| Jacobs Solutions |
| Comfort Systems USA |
Jacobs Solutions and Comfort Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Comfort Systems
The main advantage of trading using opposite Jacobs Solutions and Comfort Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Comfort Systems 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 Comfort Systems will offset losses from the drop in Comfort Systems' long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| Comfort Systems vs. MYR Group | Comfort Systems vs. Granite Construction Incorporated | Comfort Systems vs. Dycom Industries | Comfort Systems vs. MasTec Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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