Correlation Between Jacobs Solutions and Array Technologies

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

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

Diversification Opportunities for Jacobs Solutions and Array Technologies

0.03

Correlation Coefficient

Jacobs Solutions  Array Technologies

Significant diversification

The 3 months correlation between Jacobs and Array is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Array Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Array Technologies 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 Array Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Array Technologies has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Array Technologies go up and down completely randomly.

Pair Corralation between Jacobs Solutions and Array Technologies

Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 0.23 times more return on investment than Array Technologies. However, Jacobs Solutions is 4.42 times less risky than Array Technologies. It trades about 0.21 of its potential returns per unit of risk. Array Technologies is currently generating about -0.02 per unit of risk. If you would invest  12,593  in Jacobs Solutions on May 10, 2025 and sell it today you would earn a total of  2,105  from holding Jacobs Solutions or generate 16.72% 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.  Array Technologies

Jacobs Solutions

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jacobs Solutions are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking indicators, Jacobs Solutions revealed solid returns over the last few months and may actually be approaching a breakup point.

Array Technologies

Risk-Adjusted Performance

Weakest

Over the last 90 days Array Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Jacobs Solutions and Array Technologies

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

The idea behind Jacobs Solutions and Array Technologies 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.