Correlation Between Jacobs Solutions and Alliant Energy
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Alliant Energy 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 Alliant Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Alliant Energy Corp, you can compare the effects of market volatilities on Jacobs Solutions and Alliant Energy 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 Alliant Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Alliant Energy.
Diversification Opportunities for Jacobs Solutions and Alliant Energy
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jacobs and Alliant is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Alliant Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliant Energy 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 Alliant Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliant Energy Corp has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Alliant Energy go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Alliant Energy
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 1.15 times more return on investment than Alliant Energy. However, Jacobs Solutions is 1.15 times more volatile than Alliant Energy Corp. It trades about 0.06 of its potential returns per unit of risk. Alliant Energy Corp is currently generating about 0.04 per unit of risk. If you would invest 9,937 in Jacobs Solutions on September 2, 2024 and sell it today you would earn a total of 4,186 from holding Jacobs Solutions or generate 42.13% 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. Alliant Energy Corp
Performance |
| Timeline |
| Jacobs Solutions |
| Alliant Energy Corp |
Jacobs Solutions and Alliant Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Alliant Energy
The main advantage of trading using opposite Jacobs Solutions and Alliant Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Alliant Energy 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 Alliant Energy will offset losses from the drop in Alliant Energy's long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| Alliant Energy vs. DTE Energy | Alliant Energy vs. Ameren Corp | Alliant Energy vs. CenterPoint Energy | Alliant Energy vs. Pinnacle West Capital |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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