Correlation Between NexGel Warrant and Jabil Circuit

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Can any of the company-specific risk be diversified away by investing in both NexGel Warrant 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 NexGel Warrant and Jabil Circuit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexGel Warrant and Jabil Circuit, you can compare the effects of market volatilities on NexGel Warrant 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 NexGel Warrant with a short position of Jabil Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexGel Warrant and Jabil Circuit.

Diversification Opportunities for NexGel Warrant and Jabil Circuit

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between NexGel and Jabil is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding NexGel Warrant and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit and NexGel Warrant 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 NexGel Warrant 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 NexGel Warrant i.e., NexGel Warrant and Jabil Circuit go up and down completely randomly.

Pair Corralation between NexGel Warrant and Jabil Circuit

Assuming the 90 days horizon NexGel Warrant is expected to generate 5.56 times more return on investment than Jabil Circuit. However, NexGel Warrant is 5.56 times more volatile than Jabil Circuit. It trades about 0.24 of its potential returns per unit of risk. Jabil Circuit is currently generating about 0.23 per unit of risk. If you would invest  47.00  in NexGel Warrant on October 6, 2024 and sell it today you would earn a total of  28.00  from holding NexGel Warrant or generate 59.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

NexGel Warrant  vs.  Jabil Circuit

 Performance 
       Timeline  
NexGel Warrant 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in NexGel Warrant are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting essential indicators, NexGel Warrant showed solid returns over the last few months and may actually be approaching a breakup point.
Jabil Circuit 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
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.

NexGel Warrant and Jabil Circuit Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NexGel Warrant and Jabil Circuit

The main advantage of trading using opposite NexGel Warrant and Jabil Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexGel Warrant 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 NexGel Warrant 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.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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