Correlation Between Jacobs Solutions and Saia
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Saia 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 Saia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Saia Inc, you can compare the effects of market volatilities on Jacobs Solutions and Saia 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 Saia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Saia.
Diversification Opportunities for Jacobs Solutions and Saia
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jacobs and Saia is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia 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 Saia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saia Inc has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Saia go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Saia
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 1.29 times less return on investment than Saia. But when comparing it to its historical volatility, Jacobs Solutions is 2.51 times less risky than Saia. It trades about 0.09 of its potential returns per unit of risk. Saia Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 43,822 in Saia Inc on August 25, 2024 and sell it today you would earn a total of 10,347 from holding Saia Inc or generate 23.61% 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. Saia Inc
Performance |
| Timeline |
| Jacobs Solutions |
| Saia Inc |
Jacobs Solutions and Saia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Saia
The main advantage of trading using opposite Jacobs Solutions and Saia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Saia 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 Saia will offset losses from the drop in Saia's long position.| Jacobs Solutions vs. Dycom Industries | Jacobs Solutions vs. Innovate Corp | Jacobs Solutions vs. Energy Services | Jacobs Solutions vs. Wang Lee Group, |
| Saia vs. Old Dominion Freight | Saia vs. ArcBest Corp | Saia vs. Werner Enterprises | Saia vs. Knight Transportation |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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