Correlation Between Jabil and BROADWIND ENRGY

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

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

Diversification Opportunities for Jabil and BROADWIND ENRGY

0.49

Correlation Coefficient

Jabil  BROADWIND ENRGY

Very weak diversification

The 3 months correlation between Jabil and BROADWIND is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Inc and BROADWIND ENRGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROADWIND ENRGY 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 BROADWIND ENRGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROADWIND ENRGY has no effect on the direction of Jabil i.e., Jabil and BROADWIND ENRGY go up and down completely randomly.

Pair Corralation between Jabil and BROADWIND ENRGY

Assuming the 90 days horizon Jabil Inc is expected to generate 0.78 times more return on investment than BROADWIND ENRGY. However, Jabil Inc is 1.28 times less risky than BROADWIND ENRGY. It trades about -0.01 of its potential returns per unit of risk. BROADWIND ENRGY is currently generating about -0.11 per unit of risk. If you would invest  13,798  in Jabil Inc on December 23, 2024 and sell it today you would lose (488.00) from holding Jabil Inc or give up 3.54% of portfolio value over 90 days.

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

Jabil Inc  vs.  BROADWIND ENRGY

Jabil Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jabil Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Jabil is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

BROADWIND ENRGY

Risk-Adjusted Performance

Very Weak

Over the last 90 days BROADWIND ENRGY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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.

Pair Trading with Jabil and BROADWIND ENRGY

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

The idea behind Jabil Inc and BROADWIND ENRGY 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.