Correlation Between Jabil and WIMFARM SA

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

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

Diversification Opportunities for Jabil and WIMFARM SA

-0.26

Correlation Coefficient

Jabil  WIMFARM SA

Very good diversification

The 3 months correlation between Jabil and WIMFARM is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Inc and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO and Jabil 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 Jabil Inc are associated (or correlated) with WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Jabil i.e., Jabil and WIMFARM SA go up and down completely randomly.

Pair Corralation between Jabil and WIMFARM SA

Assuming the 90 days horizon Jabil Inc is expected to generate 0.48 times more return on investment than WIMFARM SA. However, Jabil Inc is 2.1 times less risky than WIMFARM SA. It trades about 0.34 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about 0.1 per unit of risk. If you would invest  12,655  in Jabil Inc on October 12, 2024 and sell it today you would earn a total of  2,205  from holding Jabil Inc or generate 17.42% return on investment over 90 days.

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

Jabil Inc  vs.  WIMFARM SA EO

Jabil Inc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Inc are ranked lower than 16 (%) 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.

WIMFARM SA EO

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WIMFARM SA EO are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, WIMFARM SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jabil and WIMFARM SA

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

The idea behind Jabil Inc and WIMFARM SA EO 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.