Correlation Between Jabil Circuit and Alvotech

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

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

Diversification Opportunities for Jabil Circuit and Alvotech

0.37

Correlation Coefficient

Jabil Circuit  Alvotech

Weak diversification

The 3 months correlation between Jabil and Alvotech is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Jabil Circuit 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 Circuit are associated (or correlated) with Alvotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvotech has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and Alvotech go up and down completely randomly.

Pair Corralation between Jabil Circuit and Alvotech

Considering the 90-day investment horizon Jabil Circuit is expected to generate 1.11 times more return on investment than Alvotech. However, Jabil Circuit is 1.11 times more volatile than Alvotech. It trades about 0.26 of its potential returns per unit of risk. Alvotech is currently generating about 0.08 per unit of risk. If you would invest  12,394  in Jabil Circuit on October 22, 2024 and sell it today you would earn a total of  3,896  from holding Jabil Circuit or generate 31.43% return on investment over 90 days.

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

Jabil Circuit  vs.  Alvotech

Jabil Circuit

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Circuit are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental drivers, Jabil Circuit disclosed solid returns over the last few months and may actually be approaching a breakup point.

Alvotech

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Alvotech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jabil Circuit and Alvotech

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

The idea behind Jabil Circuit and Alvotech 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.