Correlation Between Jacobs Solutions and Gulf Island
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Gulf Island 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 Gulf Island into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Gulf Island Fabrication, you can compare the effects of market volatilities on Jacobs Solutions and Gulf Island 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 Gulf Island. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Gulf Island.
Diversification Opportunities for Jacobs Solutions and Gulf Island
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jacobs and Gulf is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Gulf Island Fabrication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Island Fabrication 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 Gulf Island. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Island Fabrication has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Gulf Island go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Gulf Island
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 0.6 times more return on investment than Gulf Island. However, Jacobs Solutions is 1.68 times less risky than Gulf Island. It trades about 0.28 of its potential returns per unit of risk. Gulf Island Fabrication is currently generating about 0.0 per unit of risk. If you would invest 13,287 in Jacobs Solutions on November 5, 2024 and sell it today you would earn a total of 726.00 from holding Jacobs Solutions or generate 5.46% 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. Gulf Island Fabrication
Performance |
| Timeline |
| Jacobs Solutions |
| Gulf Island Fabrication |
Jacobs Solutions and Gulf Island Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Gulf Island
The main advantage of trading using opposite Jacobs Solutions and Gulf Island positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Gulf Island 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 Gulf Island will offset losses from the drop in Gulf Island's long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| Gulf Island vs. Insteel Industries | Gulf Island vs. Mayville Engineering Co | Gulf Island vs. ESAB Corp | Gulf Island vs. Northwest Pipe |
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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