Correlation Between Jabil Circuit and Bel Fuse

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

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

Diversification Opportunities for Jabil Circuit and Bel Fuse

0.48

Correlation Coefficient

Jabil Circuit  Bel Fuse

Very weak diversification

The 3 months correlation between Jabil and Bel is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and Bel Fuse B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bel Fuse B 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 Bel Fuse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bel Fuse B has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and Bel Fuse go up and down completely randomly.

Pair Corralation between Jabil Circuit and Bel Fuse

Considering the 90-day investment horizon Jabil Circuit is expected to generate 1.19 times more return on investment than Bel Fuse. However, Jabil Circuit is 1.19 times more volatile than Bel Fuse B. It trades about -0.02 of its potential returns per unit of risk. Bel Fuse B is currently generating about -0.03 per unit of risk. If you would invest  14,585  in Jabil Circuit on December 27, 2024 and sell it today you would lose (645.00) from holding Jabil Circuit or give up 4.42% of portfolio value over 90 days.

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

Jabil Circuit  vs.  Bel Fuse B

Jabil Circuit

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jabil Circuit has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Jabil Circuit is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Bel Fuse B

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bel Fuse B has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Bel Fuse is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jabil Circuit and Bel Fuse

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

The idea behind Jabil Circuit and Bel Fuse B 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 CEOs Directory module to screen CEOs from public companies around the world.