Correlation Between Apple and JABIL CIRCUIT

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

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

Diversification Opportunities for Apple and JABIL CIRCUIT

0.56

Correlation Coefficient

Apple  JABIL CIRCUIT

Very weak diversification

The 3 months correlation between Apple and JABIL is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and JABIL CIRCUIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JABIL CIRCUIT and Apple 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 Apple Inc are associated (or correlated) with JABIL CIRCUIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JABIL CIRCUIT has no effect on the direction of Apple i.e., Apple and JABIL CIRCUIT go up and down completely randomly.

Pair Corralation between Apple and JABIL CIRCUIT

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the JABIL CIRCUIT. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.16 times less risky than JABIL CIRCUIT. The stock trades about -0.17 of its potential returns per unit of risk. The JABIL CIRCUIT is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  14,093  in JABIL CIRCUIT on December 24, 2024 and sell it today you would lose (803.00) from holding JABIL CIRCUIT or give up 5.7% of portfolio value over 90 days.

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

Apple Inc  vs.  JABIL CIRCUIT

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

JABIL CIRCUIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days JABIL CIRCUIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, JABIL CIRCUIT is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Apple and JABIL CIRCUIT

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

The idea behind Apple Inc and JABIL CIRCUIT 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.