Correlation Between Wang Lee and Jacobs Solutions

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

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

Diversification Opportunities for Wang Lee and Jacobs Solutions

0.07

Correlation Coefficient

Wang Lee  Jacobs Solutions

Significant diversification

The 3 months correlation between Wang and Jacobs is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Wang Lee Group, and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions and Wang Lee 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 Wang Lee Group, 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 Wang Lee i.e., Wang Lee and Jacobs Solutions go up and down completely randomly.

Pair Corralation between Wang Lee and Jacobs Solutions

Given the investment horizon of 90 days Wang Lee Group, is expected to generate 15.66 times more return on investment than Jacobs Solutions. However, Wang Lee is 15.66 times more volatile than Jacobs Solutions. It trades about 0.02 of its potential returns per unit of risk. Jacobs Solutions is currently generating about -0.11 per unit of risk. If you would invest  186.00  in Wang Lee Group, on December 27, 2024 and sell it today you would lose (143.00) from holding Wang Lee Group, or give up 76.88% of portfolio value over 90 days.

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

Wang Lee Group,  vs.  Jacobs Solutions

Wang Lee Group,

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wang Lee Group, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Wang Lee unveiled solid returns over the last few months and may actually be approaching a breakup point.

Jacobs Solutions

Risk-Adjusted Performance

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 latest weak performance, the Stock's forward-looking indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Pair Trading with Wang Lee and Jacobs Solutions

The main advantage of trading using opposite Wang Lee and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wang Lee 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 Wang Lee Group, 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.