Correlation Between Jabil Circuit and Wabash National

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

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

Diversification Opportunities for Jabil Circuit and Wabash National

0.19

Correlation Coefficient

Jabil Circuit  Wabash National

Average diversification

The 3 months correlation between Jabil and Wabash is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National 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 Wabash National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wabash National has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and Wabash National go up and down completely randomly.

Pair Corralation between Jabil Circuit and Wabash National

Considering the 90-day investment horizon Jabil Circuit is expected to generate 0.82 times more return on investment than Wabash National. However, Jabil Circuit is 1.21 times less risky than Wabash National. It trades about 0.26 of its potential returns per unit of risk. Wabash National is currently generating about -0.2 per unit of risk. If you would invest  13,064  in Jabil Circuit on September 22, 2024 and sell it today you would earn a total of  1,436  from holding Jabil Circuit or generate 10.99% return on investment over 90 days.

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

Jabil Circuit  vs.  Wabash National

Jabil Circuit

Risk-Adjusted Performance

14 of 100

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

Wabash National

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wabash National has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Jabil Circuit and Wabash National

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

The idea behind Jabil Circuit and Wabash National 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..