Correlation Between JGC Corp and Bowman Consulting
Can any of the company-specific risk be diversified away by investing in both JGC Corp and Bowman Consulting 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 JGC Corp and Bowman Consulting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JGC Corp and Bowman Consulting Group, you can compare the effects of market volatilities on JGC Corp and Bowman Consulting 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 JGC Corp with a short position of Bowman Consulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of JGC Corp and Bowman Consulting.
Diversification Opportunities for JGC Corp and Bowman Consulting
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JGC and Bowman is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding JGC Corp and Bowman Consulting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowman Consulting and JGC Corp 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 JGC Corp are associated (or correlated) with Bowman Consulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowman Consulting has no effect on the direction of JGC Corp i.e., JGC Corp and Bowman Consulting go up and down completely randomly.
Pair Corralation between JGC Corp and Bowman Consulting
Assuming the 90 days horizon JGC Corp is expected to under-perform the Bowman Consulting. But the pink sheet apears to be less risky and, when comparing its historical volatility, JGC Corp is 1.27 times less risky than Bowman Consulting. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Bowman Consulting Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,957 in Bowman Consulting Group on August 29, 2024 and sell it today you would earn a total of 724.00 from holding Bowman Consulting Group or generate 37.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JGC Corp vs. Bowman Consulting Group
Performance |
| Timeline |
| JGC Corp |
| Bowman Consulting |
JGC Corp and Bowman Consulting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JGC Corp and Bowman Consulting
The main advantage of trading using opposite JGC Corp and Bowman Consulting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JGC Corp position performs unexpectedly, Bowman Consulting 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 Bowman Consulting will offset losses from the drop in Bowman Consulting's long position.The idea behind JGC Corp and Bowman Consulting Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bowman Consulting vs. EMCOR Group | Bowman Consulting vs. Comfort Systems USA | Bowman Consulting vs. Primoris Services | Bowman Consulting 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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