Correlation Between Jacobs Solutions and SEALSQ Corp

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

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

Diversification Opportunities for Jacobs Solutions and SEALSQ Corp

-0.2

Correlation Coefficient

Jacobs Solutions  SEALSQ Corp

Good diversification

The 3 months correlation between Jacobs and SEALSQ is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and SEALSQ Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALSQ Corp 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 SEALSQ Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALSQ Corp has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and SEALSQ Corp go up and down completely randomly.

Pair Corralation between Jacobs Solutions and SEALSQ Corp

Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 5.28 times less return on investment than SEALSQ Corp. But when comparing it to its historical volatility, Jacobs Solutions is 9.53 times less risky than SEALSQ Corp. It trades about 0.05 of its potential returns per unit of risk. SEALSQ Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,540  in SEALSQ Corp on September 24, 2024 and sell it today you would lose (1,101) from holding SEALSQ Corp or give up 71.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.72%
Values	Daily Returns

Jacobs Solutions  vs.  SEALSQ Corp

Jacobs Solutions

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jacobs Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady forward-looking indicators, Jacobs Solutions may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SEALSQ Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SEALSQ Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, SEALSQ Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jacobs Solutions and SEALSQ Corp

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

The idea behind Jacobs Solutions and SEALSQ Corp 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.