Correlation Between Jabil Circuit and Biodexa Pharmaceticals

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

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

Diversification Opportunities for Jabil Circuit and Biodexa Pharmaceticals

-0.57

Correlation Coefficient

Jabil Circuit  Biodexa Pharmaceticals

Excellent diversification

The 3 months correlation between Jabil and Biodexa is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and Biodexa Pharmaceticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biodexa Pharmaceticals 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 Biodexa Pharmaceticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biodexa Pharmaceticals has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and Biodexa Pharmaceticals go up and down completely randomly.

Pair Corralation between Jabil Circuit and Biodexa Pharmaceticals

Considering the 90-day investment horizon Jabil Circuit is expected to generate 1.48 times less return on investment than Biodexa Pharmaceticals. But when comparing it to its historical volatility, Jabil Circuit is 3.91 times less risky than Biodexa Pharmaceticals. It trades about 0.44 of its potential returns per unit of risk. Biodexa Pharmaceticals is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  382.00  in Biodexa Pharmaceticals on October 24, 2024 and sell it today you would earn a total of  58.00  from holding Biodexa Pharmaceticals or generate 15.18% return on investment over 90 days.

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

Jabil Circuit  vs.  Biodexa Pharmaceticals

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.

Biodexa Pharmaceticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biodexa Pharmaceticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Jabil Circuit and Biodexa Pharmaceticals

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

The idea behind Jabil Circuit and Biodexa Pharmaceticals 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.