Correlation Between Jacobs Solutions and Supercom
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Supercom 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 Supercom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Supercom, you can compare the effects of market volatilities on Jacobs Solutions and Supercom 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 Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Supercom.
Diversification Opportunities for Jacobs Solutions and Supercom
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jacobs and Supercom is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom 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 Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Supercom go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Supercom
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 0.13 times more return on investment than Supercom. However, Jacobs Solutions is 7.47 times less risky than Supercom. It trades about 0.08 of its potential returns per unit of risk. Supercom is currently generating about -0.01 per unit of risk. If you would invest 9,762 in Jacobs Solutions on August 31, 2024 and sell it today you would earn a total of 4,359 from holding Jacobs Solutions or generate 44.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. Supercom
Performance |
| Timeline |
| Jacobs Solutions |
| Supercom |
Jacobs Solutions and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Supercom
The main advantage of trading using opposite Jacobs Solutions and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Supercom 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 Supercom will offset losses from the drop in Supercom's long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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