Correlation Between Southland Holdings and Jacobs Solutions
Can any of the company-specific risk be diversified away by investing in both Southland Holdings and Jacobs Solutions 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 Southland Holdings and Jacobs Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southland Holdings and Jacobs Solutions, you can compare the effects of market volatilities on Southland Holdings and Jacobs Solutions 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 Southland Holdings with a short position of Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southland Holdings and Jacobs Solutions.
Diversification Opportunities for Southland Holdings and Jacobs Solutions
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Southland and Jacobs is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Southland Holdings and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions and Southland Holdings 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 Southland Holdings are associated (or correlated) with Jacobs Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacobs Solutions has no effect on the direction of Southland Holdings i.e., Southland Holdings and Jacobs Solutions go up and down completely randomly.
Pair Corralation between Southland Holdings and Jacobs Solutions
Given the investment horizon of 90 days Southland Holdings is expected to under-perform the Jacobs Solutions. In addition to that, Southland Holdings is 4.02 times more volatile than Jacobs Solutions. It trades about -0.02 of its total potential returns per unit of risk. Jacobs Solutions is currently generating about 0.1 per unit of volatility. If you would invest 12,839 in Jacobs Solutions on August 26, 2024 and sell it today you would earn a total of 897.00 from holding Jacobs Solutions or generate 6.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southland Holdings vs. Jacobs Solutions
Performance |
| Timeline |
| Southland Holdings |
| Jacobs Solutions |
Southland Holdings and Jacobs Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southland Holdings and Jacobs Solutions
The main advantage of trading using opposite Southland Holdings and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southland Holdings position performs unexpectedly, Jacobs Solutions 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 Jacobs Solutions will offset losses from the drop in Jacobs Solutions' long position.| Southland Holdings vs. Bank of America | Southland Holdings vs. Warner Music Group | Southland Holdings vs. Sun Life Financial | Southland Holdings vs. SkyWest |
| Jacobs Solutions vs. Innovate Corp | Jacobs Solutions vs. Energy Services | Jacobs Solutions vs. Api Group Corp | Jacobs Solutions vs. Topbuild Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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