Correlation Between Jacobs Solutions and Concrete Pumping

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

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

Diversification Opportunities for Jacobs Solutions and Concrete Pumping

-0.42

Correlation Coefficient

Jacobs Solutions  Concrete Pumping

Very good diversification

The 3 months correlation between Jacobs and Concrete is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Concrete Pumping Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concrete Pumping Holdings 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 Concrete Pumping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concrete Pumping Holdings has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Concrete Pumping go up and down completely randomly.

Pair Corralation between Jacobs Solutions and Concrete Pumping

Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 0.37 times more return on investment than Concrete Pumping. However, Jacobs Solutions is 2.73 times less risky than Concrete Pumping. It trades about -0.16 of its potential returns per unit of risk. Concrete Pumping Holdings is currently generating about -0.07 per unit of risk. If you would invest  13,774  in Jacobs Solutions on October 6, 2024 and sell it today you would lose (394.00) from holding Jacobs Solutions or give up 2.86% of portfolio value over 90 days.

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

Jacobs Solutions  vs.  Concrete Pumping Holdings

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.

Concrete Pumping Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Concrete Pumping Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal fundamental indicators, Concrete Pumping reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jacobs Solutions and Concrete Pumping

The main advantage of trading using opposite Jacobs Solutions and Concrete Pumping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Concrete Pumping 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 Concrete Pumping will offset losses from the drop in Concrete Pumping's long position.

The idea behind Jacobs Solutions and Concrete Pumping Holdings 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.