Correlation Between 50249AAJ2 and Jabil Circuit

Can any of the company-specific risk be diversified away by investing in both 50249AAJ2 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 50249AAJ2 and Jabil Circuit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LYB INTERNATIONAL FINANCE and Jabil Circuit, you can compare the effects of market volatilities on 50249AAJ2 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 50249AAJ2 with a short position of Jabil Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of 50249AAJ2 and Jabil Circuit.

Diversification Opportunities for 50249AAJ2 and Jabil Circuit

-0.39

Correlation Coefficient

50249AAJ2  Jabil Circuit

Very good diversification

The 3 months correlation between 50249AAJ2 and Jabil is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding LYB INTERNATIONAL FINANCE and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit and 50249AAJ2 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 LYB INTERNATIONAL FINANCE 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 50249AAJ2 i.e., 50249AAJ2 and Jabil Circuit go up and down completely randomly.

Pair Corralation between 50249AAJ2 and Jabil Circuit

Assuming the 90 days trading horizon 50249AAJ2 is expected to generate 3.79 times less return on investment than Jabil Circuit. In addition to that, 50249AAJ2 is 1.01 times more volatile than Jabil Circuit. It trades about 0.05 of its total potential returns per unit of risk. Jabil Circuit is currently generating about 0.19 per unit of volatility. If you would invest  13,544  in Jabil Circuit on October 11, 2024 and sell it today you would earn a total of  1,851  from holding Jabil Circuit or generate 13.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.12%
Values	Daily Returns

LYB INTERNATIONAL FINANCE  vs.  Jabil Circuit

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LYB INTERNATIONAL FINANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 50249AAJ2 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Jabil Circuit

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Circuit are ranked lower than 15 (%) 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.

Pair Trading with 50249AAJ2 and Jabil Circuit

The main advantage of trading using opposite 50249AAJ2 and Jabil Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 50249AAJ2 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 LYB INTERNATIONAL FINANCE 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.