Correlation Between Jacobs Solutions and Bill

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

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

Diversification Opportunities for Jacobs Solutions and Bill

0.11

Correlation Coefficient

Jacobs Solutions  Bill

Average diversification

The 3 months correlation between Jacobs and Bill is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Bill Com Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bill Com 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 Bill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bill Com Holdings has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Bill go up and down completely randomly.

Pair Corralation between Jacobs Solutions and Bill

Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 0.37 times more return on investment than Bill. However, Jacobs Solutions is 2.72 times less risky than Bill. It trades about 0.05 of its potential returns per unit of risk. Bill Com Holdings is currently generating about 0.01 per unit of risk. If you would invest  10,138  in Jacobs Solutions on September 26, 2024 and sell it today you would earn a total of  3,462  from holding Jacobs Solutions or generate 34.15% return on investment over 90 days.

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

Jacobs Solutions  vs.  Bill Com Holdings

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.

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.

Pair Trading with Jacobs Solutions and Bill

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

The idea behind Jacobs Solutions and Bill Com 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.