Correlation Between Adyen NV and Jabil

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

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

Diversification Opportunities for Adyen NV and Jabil

-0.1

Correlation Coefficient

Adyen NV  Jabil

Good diversification

The 3 months correlation between Adyen and Jabil is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Adyen NV and Jabil Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Inc and Adyen NV 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 Adyen NV are associated (or correlated) with Jabil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jabil Inc has no effect on the direction of Adyen NV i.e., Adyen NV and Jabil go up and down completely randomly.

Pair Corralation between Adyen NV and Jabil

Assuming the 90 days horizon Adyen NV is expected to generate 133.74 times less return on investment than Jabil. But when comparing it to its historical volatility, Adyen NV is 1.92 times less risky than Jabil. It trades about 0.0 of its potential returns per unit of risk. Jabil Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  12,760  in Jabil Inc on October 4, 2024 and sell it today you would earn a total of  1,130  from holding Jabil Inc or generate 8.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

Adyen NV  vs.  Jabil Inc

Adyen NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adyen NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Adyen NV is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Jabil Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jabil reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adyen NV and Jabil

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

The idea behind Adyen NV and Jabil Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.