Correlation Between Jacobs Solutions and Getty Realty
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Getty Realty 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 Getty Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Getty Realty, you can compare the effects of market volatilities on Jacobs Solutions and Getty Realty 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 Getty Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Getty Realty.
Diversification Opportunities for Jacobs Solutions and Getty Realty
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jacobs and Getty is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Getty Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Realty 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 Getty Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Realty has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Getty Realty go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Getty Realty
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 1.1 times more return on investment than Getty Realty. However, Jacobs Solutions is 1.1 times more volatile than Getty Realty. It trades about 0.08 of its potential returns per unit of risk. Getty Realty is currently generating about 0.01 per unit of risk. If you would invest 9,616 in Jacobs Solutions on August 31, 2024 and sell it today you would earn a total of 4,507 from holding Jacobs Solutions or generate 46.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. Getty Realty
Performance |
| Timeline |
| Jacobs Solutions |
| Getty Realty |
Jacobs Solutions and Getty Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Getty Realty
The main advantage of trading using opposite Jacobs Solutions and Getty Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Getty Realty 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 Getty Realty will offset losses from the drop in Getty Realty's long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| Getty Realty vs. Regency Centers | Getty Realty vs. Site Centers Corp | Getty Realty vs. Brixmor Property | Getty Realty vs. Tanger Factory Outlet |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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