Correlation Between Jabil Circuit and Critical Metals

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

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

Diversification Opportunities for Jabil Circuit and Critical Metals

-0.17

Correlation Coefficient

Jabil Circuit  Critical Metals

Good diversification

The 3 months correlation between Jabil and Critical is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and Critical Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Critical Metals Corp 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 Critical Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Critical Metals Corp has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and Critical Metals go up and down completely randomly.

Pair Corralation between Jabil Circuit and Critical Metals

Considering the 90-day investment horizon Jabil Circuit is expected to generate 6.72 times less return on investment than Critical Metals. But when comparing it to its historical volatility, Jabil Circuit is 5.03 times less risky than Critical Metals. It trades about 0.02 of its potential returns per unit of risk. Critical Metals Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,091  in Critical Metals Corp on September 15, 2024 and sell it today you would lose (456.00) from holding Critical Metals Corp or give up 41.8% of portfolio value over 90 days.

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

Jabil Circuit  vs.  Critical Metals Corp

Jabil Circuit

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Circuit are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental drivers, Jabil Circuit disclosed solid returns over the last few months and may actually be approaching a breakup point.

Critical Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Critical Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's primary indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Jabil Circuit and Critical Metals

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

The idea behind Jabil Circuit and Critical Metals Corp 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.