Correlation Between Jacobs Solutions and 374Water Common

Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and 374Water Common 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 374Water Common into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jacobs Solutions and 374Water Common Stock, you can compare the effects of market volatilities on Jacobs Solutions and 374Water Common 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 374Water Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and 374Water Common.

Diversification Opportunities for Jacobs Solutions and 374Water Common

-0.57

Correlation Coefficient

Jacobs Solutions  374Water Common

Excellent diversification

The 3 months correlation between Jacobs and 374Water is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and 374Water Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 374Water Common Stock 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 374Water Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 374Water Common Stock has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and 374Water Common go up and down completely randomly.

Pair Corralation between Jacobs Solutions and 374Water Common

Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 0.12 times more return on investment than 374Water Common. However, Jacobs Solutions is 8.42 times less risky than 374Water Common. It trades about 0.22 of its potential returns per unit of risk. 374Water Common Stock is currently generating about -0.01 per unit of risk. If you would invest  11,799  in Jacobs Solutions on May 6, 2025 and sell it today you would earn a total of  2,109  from holding Jacobs Solutions or generate 17.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Jacobs Solutions  vs.  374Water Common Stock

Jacobs Solutions

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jacobs Solutions are ranked lower than 17 (%) 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.

374Water Common Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days 374Water Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Jacobs Solutions and 374Water Common

The main advantage of trading using opposite Jacobs Solutions and 374Water Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, 374Water Common 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 374Water Common will offset losses from the drop in 374Water Common's long position.

The idea behind Jacobs Solutions and 374Water Common Stock 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.