Correlation Between LightPath Technologies and Jabil Circuit

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

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

Diversification Opportunities for LightPath Technologies and Jabil Circuit

0.53

Correlation Coefficient

LightPath Technologies  Jabil Circuit

Very weak diversification

The 3 months correlation between LightPath and Jabil is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding LightPath Technologies and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit and LightPath Technologies 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 LightPath Technologies are associated (or correlated) with Jabil Circuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jabil Circuit has no effect on the direction of LightPath Technologies i.e., LightPath Technologies and Jabil Circuit go up and down completely randomly.

Pair Corralation between LightPath Technologies and Jabil Circuit

Given the investment horizon of 90 days LightPath Technologies is expected to under-perform the Jabil Circuit. In addition to that, LightPath Technologies is 2.51 times more volatile than Jabil Circuit. It trades about -0.07 of its total potential returns per unit of risk. Jabil Circuit is currently generating about 0.01 per unit of volatility. If you would invest  14,757  in Jabil Circuit on December 26, 2024 and sell it today you would earn a total of  72.00  from holding Jabil Circuit or generate 0.49% return on investment over 90 days.

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

LightPath Technologies  vs.  Jabil Circuit

LightPath Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days LightPath Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Jabil Circuit

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Circuit are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with LightPath Technologies and Jabil Circuit

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

The idea behind LightPath Technologies and Jabil Circuit 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.