Correlation Between Jacobs Solutions and Granite Construction
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Granite Construction 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 Granite Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Granite Construction Incorporated, you can compare the effects of market volatilities on Jacobs Solutions and Granite Construction 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 Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Granite Construction.
Diversification Opportunities for Jacobs Solutions and Granite Construction
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jacobs and Granite is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Granite Construction Incorpora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction 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 Granite Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Construction has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Granite Construction go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Granite Construction
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 53.64 times less return on investment than Granite Construction. In addition to that, Jacobs Solutions is 1.42 times more volatile than Granite Construction Incorporated. It trades about 0.01 of its total potential returns per unit of risk. Granite Construction Incorporated is currently generating about 0.57 per unit of volatility. If you would invest 8,206 in Granite Construction Incorporated on August 31, 2024 and sell it today you would earn a total of 1,663 from holding Granite Construction Incorporated or generate 20.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. Granite Construction Incorpora
Performance |
| Timeline |
| Jacobs Solutions |
| Granite Construction |
Jacobs Solutions and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Granite Construction
The main advantage of trading using opposite Jacobs Solutions and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Granite Construction 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 Granite Construction will offset losses from the drop in Granite Construction's long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| Granite Construction vs. EMCOR Group | Granite Construction vs. Comfort Systems USA | Granite Construction vs. Primoris Services | Granite Construction vs. Construction Partners |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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