Correlation Between Coda Octopus and Jabil Circuit

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

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

Diversification Opportunities for Coda Octopus and Jabil Circuit

-0.6

Correlation Coefficient

Coda Octopus  Jabil Circuit

Excellent diversification

The 3 months correlation between Coda and Jabil is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Coda Octopus Group and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit and Coda Octopus 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 Coda Octopus Group 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 Coda Octopus i.e., Coda Octopus and Jabil Circuit go up and down completely randomly.

Pair Corralation between Coda Octopus and Jabil Circuit

Given the investment horizon of 90 days Coda Octopus Group is expected to generate 0.72 times more return on investment than Jabil Circuit. However, Coda Octopus Group is 1.38 times less risky than Jabil Circuit. It trades about -0.3 of its potential returns per unit of risk. Jabil Circuit is currently generating about -0.24 per unit of risk. If you would invest  795.00  in Coda Octopus Group on December 4, 2024 and sell it today you would lose (59.00) from holding Coda Octopus Group or give up 7.42% of portfolio value over 90 days.

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

Coda Octopus Group  vs.  Jabil Circuit

Coda Octopus Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coda Octopus Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Jabil Circuit

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Circuit are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental drivers, Jabil Circuit may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Coda Octopus and Jabil Circuit

The main advantage of trading using opposite Coda Octopus and Jabil Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coda Octopus 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 Coda Octopus Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.