Correlation Between Intevac and Jabil Circuit

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

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

Diversification Opportunities for Intevac and Jabil Circuit

-0.37

Correlation Coefficient

Intevac  Jabil Circuit

Very good diversification

The 3 months correlation between Intevac and Jabil is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Intevac and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit and Intevac 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 Intevac 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 Intevac i.e., Intevac and Jabil Circuit go up and down completely randomly.

Pair Corralation between Intevac and Jabil Circuit

Given the investment horizon of 90 days Intevac is expected to generate 1.24 times more return on investment than Jabil Circuit. However, Intevac is 1.24 times more volatile than Jabil Circuit. It trades about 0.12 of its potential returns per unit of risk. Jabil Circuit is currently generating about -0.01 per unit of risk. If you would invest  335.00  in Intevac on December 28, 2024 and sell it today you would earn a total of  65.00  from holding Intevac or generate 19.4% return on investment over 90 days.

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

Intevac  vs.  Jabil Circuit

Intevac

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intevac are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Intevac exhibited solid returns over the last few months and may actually be approaching a breakup point.

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. Despite quite persistent fundamental drivers, Jabil Circuit is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Intevac and Jabil Circuit

The main advantage of trading using opposite Intevac and Jabil Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intevac 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 Intevac 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.