Correlation Between Bill and Jacobs Solutions

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

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

Diversification Opportunities for Bill and Jacobs Solutions

0.19

Correlation Coefficient

Bill  Jacobs Solutions

Average diversification

The 3 months correlation between Bill and Jacobs is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bill Com Holdings and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions and Bill 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 Bill Com 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 Bill i.e., Bill and Jacobs Solutions go up and down completely randomly.

Pair Corralation between Bill and Jacobs Solutions

Given the investment horizon of 90 days Bill Com Holdings is expected to generate 2.44 times more return on investment than Jacobs Solutions. However, Bill is 2.44 times more volatile than Jacobs Solutions. It trades about 0.28 of its potential returns per unit of risk. Jacobs Solutions is currently generating about -0.05 per unit of risk. If you would invest  5,669  in Bill Com Holdings on September 26, 2024 and sell it today you would earn a total of  3,035  from holding Bill Com Holdings or generate 53.54% return on investment over 90 days.

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

Bill Com Holdings  vs.  Jacobs Solutions

Bill Com Holdings

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Jacobs Solutions

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jacobs Solutions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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 Bill and Jacobs Solutions

The main advantage of trading using opposite Bill and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bill 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 Bill Com Holdings 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.