Correlation Between Jacobs Solutions and PROSHARES ULTRASHORT
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and PROSHARES ULTRASHORT 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 PROSHARES ULTRASHORT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and PROSHARES ULTRASHORT RUSSELL, you can compare the effects of market volatilities on Jacobs Solutions and PROSHARES ULTRASHORT 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 PROSHARES ULTRASHORT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and PROSHARES ULTRASHORT.
Diversification Opportunities for Jacobs Solutions and PROSHARES ULTRASHORT
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jacobs and PROSHARES is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and PROSHARES ULTRASHORT RUSSELL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROSHARES ULTRASHORT 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 PROSHARES ULTRASHORT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROSHARES ULTRASHORT has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and PROSHARES ULTRASHORT go up and down completely randomly.
Pair Corralation between Jacobs Solutions and PROSHARES ULTRASHORT
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 0.07 times more return on investment than PROSHARES ULTRASHORT. However, Jacobs Solutions is 15.33 times less risky than PROSHARES ULTRASHORT. It trades about 0.12 of its potential returns per unit of risk. PROSHARES ULTRASHORT RUSSELL is currently generating about -0.02 per unit of risk. If you would invest 11,496 in Jacobs Solutions on September 3, 2024 and sell it today you would earn a total of 2,627 from holding Jacobs Solutions or generate 22.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 32.0% |
| Values | Daily Returns |
Jacobs Solutions vs. PROSHARES ULTRASHORT RUSSELL
Performance |
| Timeline |
| Jacobs Solutions |
| PROSHARES ULTRASHORT |
Jacobs Solutions and PROSHARES ULTRASHORT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and PROSHARES ULTRASHORT
The main advantage of trading using opposite Jacobs Solutions and PROSHARES ULTRASHORT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, PROSHARES ULTRASHORT 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 PROSHARES ULTRASHORT will offset losses from the drop in PROSHARES ULTRASHORT's long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| PROSHARES ULTRASHORT vs. Jacobs Solutions | PROSHARES ULTRASHORT vs. Dycom Industries | PROSHARES ULTRASHORT vs. Innovate Corp | PROSHARES ULTRASHORT vs. Energy Services |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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