Correlation Between Jabil Circuit and Canlan Ice

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

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

Diversification Opportunities for Jabil Circuit and Canlan Ice

0.36

Correlation Coefficient

Jabil Circuit  Canlan Ice

Weak diversification

The 3 months correlation between Jabil and Canlan is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and Canlan Ice go up and down completely randomly.

Pair Corralation between Jabil Circuit and Canlan Ice

Considering the 90-day investment horizon Jabil Circuit is expected to generate 25.69 times more return on investment than Canlan Ice. However, Jabil Circuit is 25.69 times more volatile than Canlan Ice Sports. It trades about 0.02 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.13 per unit of risk. If you would invest  14,757  in Jabil Circuit on December 25, 2024 and sell it today you would earn a total of  240.00  from holding Jabil Circuit or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Jabil Circuit  vs.  Canlan Ice Sports

Jabil Circuit

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Circuit are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Canlan Ice Sports

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canlan Ice Sports are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Canlan Ice is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Jabil Circuit and Canlan Ice

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

The idea behind Jabil Circuit and Canlan Ice Sports 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.