Correlation Between Textron and Jacobs Solutions

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

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

Diversification Opportunities for Textron and Jacobs Solutions

-0.2

Correlation Coefficient

Textron  Jacobs Solutions

Good diversification

The 3 months correlation between Textron and Jacobs is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Textron and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions and Textron 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 Textron 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 Textron i.e., Textron and Jacobs Solutions go up and down completely randomly.

Pair Corralation between Textron and Jacobs Solutions

Considering the 90-day investment horizon Textron is expected to generate 4.74 times less return on investment than Jacobs Solutions. In addition to that, Textron is 1.29 times more volatile than Jacobs Solutions. It trades about 0.03 of its total potential returns per unit of risk. Jacobs Solutions is currently generating about 0.17 per unit of volatility. If you would invest  13,172  in Jacobs Solutions on July 2, 2025 and sell it today you would earn a total of  1,674  from holding Jacobs Solutions or generate 12.71% return on investment over 90 days.

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

Textron  vs.  Jacobs Solutions

Textron

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Textron are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Textron is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Jacobs Solutions

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jacobs Solutions are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking indicators, Jacobs Solutions may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Textron and Jacobs Solutions

The main advantage of trading using opposite Textron and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Textron 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 Textron 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..