Correlation Between Jabil Circuit and Vishay Intertechnology

Can any of the company-specific risk be diversified away by investing in both Jabil Circuit and Vishay Intertechnology 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 Intertechnology 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 Intertechnology, you can compare the effects of market volatilities on Jabil Circuit and Vishay Intertechnology 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 Intertechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jabil Circuit and Vishay Intertechnology.

Diversification Opportunities for Jabil Circuit and Vishay Intertechnology

0.1

Correlation Coefficient

Jabil Circuit  Vishay Intertechnology

Average diversification

The 3 months correlation between Jabil and Vishay is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology 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 Intertechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Intertechnology has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and Vishay Intertechnology go up and down completely randomly.

Pair Corralation between Jabil Circuit and Vishay Intertechnology

Considering the 90-day investment horizon Jabil Circuit is expected to generate 0.87 times more return on investment than Vishay Intertechnology. However, Jabil Circuit is 1.15 times less risky than Vishay Intertechnology. It trades about 0.0 of its potential returns per unit of risk. Vishay Intertechnology is currently generating about 0.0 per unit of risk. If you would invest  14,585  in Jabil Circuit on December 27, 2024 and sell it today you would lose (199.00) from holding Jabil Circuit or give up 1.36% of portfolio value over 90 days.

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

Jabil Circuit  vs.  Vishay Intertechnology

Jabil Circuit

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jabil Circuit has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Vishay Intertechnology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vishay Intertechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Vishay Intertechnology is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Jabil Circuit and Vishay Intertechnology

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

The idea behind Jabil Circuit and Vishay Intertechnology 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.