Correlation Between Jabil Circuit and Vishay Precision

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

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

Diversification Opportunities for Jabil Circuit and Vishay Precision

-0.43

Correlation Coefficient

Jabil Circuit  Vishay Precision

Very good diversification

The 3 months correlation between Jabil and Vishay is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and Vishay Precision Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Precision 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 Vishay Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Precision has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and Vishay Precision go up and down completely randomly.

Pair Corralation between Jabil Circuit and Vishay Precision

Considering the 90-day investment horizon Jabil Circuit is expected to generate 0.97 times more return on investment than Vishay Precision. However, Jabil Circuit is 1.03 times less risky than Vishay Precision. It trades about 0.19 of its potential returns per unit of risk. Vishay Precision Group is currently generating about 0.03 per unit of risk. If you would invest  10,565  in Jabil Circuit on September 15, 2024 and sell it today you would earn a total of  2,948  from holding Jabil Circuit or generate 27.9% return on investment over 90 days.

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

Jabil Circuit  vs.  Vishay Precision Group

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 weak fundamental drivers, Jabil Circuit disclosed solid returns over the last few months and may actually be approaching a breakup point.

Vishay Precision

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Precision Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Vishay Precision is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Jabil Circuit and Vishay Precision

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

The idea behind Jabil Circuit and Vishay Precision 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.