Correlation Between Jacobs Solutions and MasTec
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and MasTec 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 MasTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and MasTec Inc, you can compare the effects of market volatilities on Jacobs Solutions and MasTec 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 MasTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and MasTec.
Diversification Opportunities for Jacobs Solutions and MasTec
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jacobs and MasTec is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and MasTec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MasTec Inc 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 MasTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MasTec Inc has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and MasTec go up and down completely randomly.
Pair Corralation between Jacobs Solutions and MasTec
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 2.01 times less return on investment than MasTec. But when comparing it to its historical volatility, Jacobs Solutions is 1.91 times less risky than MasTec. It trades about 0.05 of its potential returns per unit of risk. MasTec Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8,735 in MasTec Inc on August 23, 2024 and sell it today you would earn a total of 5,347 from holding MasTec Inc or generate 61.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. MasTec Inc
Performance |
| Timeline |
| Jacobs Solutions |
| MasTec Inc |
Jacobs Solutions and MasTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and MasTec
The main advantage of trading using opposite Jacobs Solutions and MasTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, MasTec 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 MasTec will offset losses from the drop in MasTec's long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| MasTec vs. EMCOR Group | MasTec vs. Comfort Systems USA | MasTec vs. Primoris Services | MasTec vs. Granite Construction Incorporated |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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