Correlation Between Jabil and NetSol Technologies

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

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

Diversification Opportunities for Jabil and NetSol Technologies

-0.62

Correlation Coefficient

Jabil  NetSol Technologies

Excellent diversification

The 3 months correlation between Jabil and NetSol is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Inc and NetSol Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetSol Technologies 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 NetSol Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetSol Technologies has no effect on the direction of Jabil i.e., Jabil and NetSol Technologies go up and down completely randomly.

Pair Corralation between Jabil and NetSol Technologies

Assuming the 90 days horizon Jabil Inc is expected to generate 0.93 times more return on investment than NetSol Technologies. However, Jabil Inc is 1.07 times less risky than NetSol Technologies. It trades about 0.18 of its potential returns per unit of risk. NetSol Technologies is currently generating about -0.07 per unit of risk. If you would invest  12,622  in Jabil Inc on October 7, 2024 and sell it today you would earn a total of  1,993  from holding Jabil Inc or generate 15.79% return on investment over 90 days.

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

Jabil Inc  vs.  NetSol Technologies

Jabil Inc

Risk-Adjusted Performance

16 of 100

Good

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.

NetSol Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NetSol Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Jabil and NetSol Technologies

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

The idea behind Jabil Inc and NetSol Technologies 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.