Correlation Between Jabil Circuit and GEN Restaurant

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Can any of the company-specific risk be diversified away by investing in both Jabil Circuit and GEN Restaurant 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 GEN Restaurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jabil Circuit and GEN Restaurant Group,, you can compare the effects of market volatilities on Jabil Circuit and GEN Restaurant 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 GEN Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jabil Circuit and GEN Restaurant.

Diversification Opportunities for Jabil Circuit and GEN Restaurant

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Jabil and GEN is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant Group, 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 GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and GEN Restaurant go up and down completely randomly.

Pair Corralation between Jabil Circuit and GEN Restaurant

Considering the 90-day investment horizon Jabil Circuit is expected to generate 0.58 times more return on investment than GEN Restaurant. However, Jabil Circuit is 1.72 times less risky than GEN Restaurant. It trades about 0.2 of its potential returns per unit of risk. GEN Restaurant Group, is currently generating about -0.04 per unit of risk. If you would invest  10,335  in Jabil Circuit on October 3, 2024 and sell it today you would earn a total of  4,041  from holding Jabil Circuit or generate 39.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jabil Circuit  vs.  GEN Restaurant Group,

 Performance 
       Timeline  
Jabil Circuit 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Circuit are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Jabil Circuit disclosed solid returns over the last few months and may actually be approaching a breakup point.
GEN Restaurant Group, 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GEN Restaurant Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, GEN Restaurant is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Jabil Circuit and GEN Restaurant Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jabil Circuit and GEN Restaurant

The main advantage of trading using opposite Jabil Circuit and GEN Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jabil Circuit position performs unexpectedly, GEN Restaurant 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 GEN Restaurant will offset losses from the drop in GEN Restaurant's long position.
The idea behind Jabil Circuit and GEN Restaurant Group, 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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