Correlation Between Jacobs Solutions and Total System

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

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

Diversification Opportunities for Jacobs Solutions and Total System

0.0

Correlation Coefficient

Jacobs Solutions  Total System

Pay attention - limited upside

The 3 months correlation between Jacobs and Total is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Total System Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total System Services 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 Total System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total System Services has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Total System go up and down completely randomly.

Pair Corralation between Jacobs Solutions and Total System

If you would invest (100.00) in Total System Services on February 3, 2024 and sell it today you would earn a total of  100.00  from holding Total System Services or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Jacobs Solutions  vs.  Total System Services

Jacobs Solutions

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jacobs Solutions are ranked lower than 7 (%) 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.

Total System Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Total System Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Total System is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Jacobs Solutions and Total System

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

The idea behind Jacobs Solutions and Total System Services 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.