Correlation Between Artisan Partners and Jacobs Solutions

Can any of the company-specific risk be diversified away by investing in both Artisan Partners 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 Artisan Partners and Jacobs Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Artisan Partners Asset and Jacobs Solutions, you can compare the effects of market volatilities on Artisan Partners 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 Artisan Partners with a short position of Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Partners and Jacobs Solutions.

Diversification Opportunities for Artisan Partners and Jacobs Solutions

0.27

Correlation Coefficient

Artisan Partners  Jacobs Solutions

Modest diversification

The 3 months correlation between Artisan and Jacobs is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions and Artisan Partners 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 Artisan Partners Asset 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 Artisan Partners i.e., Artisan Partners and Jacobs Solutions go up and down completely randomly.

Pair Corralation between Artisan Partners and Jacobs Solutions

Given the investment horizon of 90 days Artisan Partners is expected to generate 1.72 times less return on investment than Jacobs Solutions. In addition to that, Artisan Partners is 1.38 times more volatile than Jacobs Solutions. It trades about 0.03 of its total potential returns per unit of risk. Jacobs Solutions is currently generating about 0.07 per unit of volatility. If you would invest  10,933  in Jacobs Solutions on October 10, 2024 and sell it today you would earn a total of  2,377  from holding Jacobs Solutions or generate 21.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Artisan Partners Asset  vs.  Jacobs Solutions

Artisan Partners Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Partners Asset has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Artisan Partners is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Jacobs Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jacobs Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady forward-looking indicators, Jacobs Solutions is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Artisan Partners and Jacobs Solutions

The main advantage of trading using opposite Artisan Partners and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Partners 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.

The idea behind Artisan Partners Asset and Jacobs Solutions 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.