Correlation Between Jabil Circuit and WPLAU

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

By analyzing existing cross correlation between Jabil Circuit and WPLAU 365 05 MAR 25, you can compare the effects of market volatilities on Jabil Circuit and WPLAU 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 WPLAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jabil Circuit and WPLAU.

Diversification Opportunities for Jabil Circuit and WPLAU

0.8

Correlation Coefficient

Jabil Circuit  WPLAU

Very poor diversification

The 3 months correlation between Jabil and WPLAU is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and WPLAU 365 05 MAR 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPLAU 365 05 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 WPLAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPLAU 365 05 has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and WPLAU go up and down completely randomly.

Pair Corralation between Jabil Circuit and WPLAU

Considering the 90-day investment horizon Jabil Circuit is expected to generate 26.83 times more return on investment than WPLAU. However, Jabil Circuit is 26.83 times more volatile than WPLAU 365 05 MAR 25. It trades about 0.15 of its potential returns per unit of risk. WPLAU 365 05 MAR 25 is currently generating about 0.22 per unit of risk. If you would invest  11,090  in Jabil Circuit on October 22, 2024 and sell it today you would earn a total of  5,200  from holding Jabil Circuit or generate 46.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	46.4%
Values	Daily Returns

Jabil Circuit  vs.  WPLAU 365 05 MAR 25

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.

WPLAU 365 05

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WPLAU 365 05 MAR 25 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, WPLAU is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jabil Circuit and WPLAU

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

The idea behind Jabil Circuit and WPLAU 365 05 MAR 25 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.