Correlation Between Jacobs Solutions and Barnes
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Barnes 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 Barnes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Barnes Group, you can compare the effects of market volatilities on Jacobs Solutions and Barnes 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 Barnes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Barnes.
Diversification Opportunities for Jacobs Solutions and Barnes
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jacobs and Barnes is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group 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 Barnes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barnes Group has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Barnes go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Barnes
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 1.85 times less return on investment than Barnes. But when comparing it to its historical volatility, Jacobs Solutions is 1.27 times less risky than Barnes. It trades about 0.15 of its potential returns per unit of risk. Barnes Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,645 in Barnes Group on September 12, 2024 and sell it today you would earn a total of 1,055 from holding Barnes Group or generate 28.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Jacobs Solutions vs. Barnes Group
Performance |
Timeline |
Jacobs Solutions |
Barnes Group |
Jacobs Solutions and Barnes Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jacobs Solutions and Barnes
The main advantage of trading using opposite Jacobs Solutions and Barnes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Barnes 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 Barnes will offset losses from the drop in Barnes' long position.Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |