Correlation Between NetSol Technologies and Jabil

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

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

Diversification Opportunities for NetSol Technologies and Jabil

-0.07

Correlation Coefficient

NetSol Technologies  Jabil

Good diversification

The 3 months correlation between NetSol and Jabil is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding NetSol Technologies and Jabil Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Inc and NetSol 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 NetSol Technologies are associated (or correlated) with Jabil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jabil Inc has no effect on the direction of NetSol Technologies i.e., NetSol Technologies and Jabil go up and down completely randomly.

Pair Corralation between NetSol Technologies and Jabil

Assuming the 90 days trading horizon NetSol Technologies is expected to generate 13.8 times less return on investment than Jabil. In addition to that, NetSol Technologies is 1.5 times more volatile than Jabil Inc. It trades about 0.03 of its total potential returns per unit of risk. Jabil Inc is currently generating about 0.71 per unit of volatility. If you would invest  13,805  in Jabil Inc on October 22, 2024 and sell it today you would earn a total of  2,215  from holding Jabil Inc or generate 16.04% return on investment over 90 days.

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

NetSol Technologies  vs.  Jabil Inc

NetSol Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NetSol Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Jabil Inc

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Inc are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jabil reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NetSol Technologies and Jabil

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

The idea behind NetSol Technologies and Jabil Inc 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.