Correlation Between Jabil Circuit and Zepp Health

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

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

Diversification Opportunities for Jabil Circuit and Zepp Health

-0.47

Correlation Coefficient

Jabil Circuit  Zepp Health

Very good diversification

The 3 months correlation between Jabil and Zepp is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and Zepp Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zepp Health Corp 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 Zepp Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zepp Health Corp has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and Zepp Health go up and down completely randomly.

Pair Corralation between Jabil Circuit and Zepp Health

Considering the 90-day investment horizon Jabil Circuit is expected to generate 0.5 times more return on investment than Zepp Health. However, Jabil Circuit is 1.98 times less risky than Zepp Health. It trades about 0.08 of its potential returns per unit of risk. Zepp Health Corp is currently generating about -0.02 per unit of risk. If you would invest  7,816  in Jabil Circuit on October 22, 2024 and sell it today you would earn a total of  8,474  from holding Jabil Circuit or generate 108.42% 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.  Zepp Health Corp

Jabil Circuit

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Circuit are ranked lower than 19 (%) 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.

Zepp Health Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zepp Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Jabil Circuit and Zepp Health

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

The idea behind Jabil Circuit and Zepp Health Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.