Correlation Between WPLAU and Jabil Circuit

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

By analyzing existing cross correlation between WPLAU 365 05 MAR 25 and Jabil Circuit, you can compare the effects of market volatilities on WPLAU 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 WPLAU with a short position of Jabil Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of WPLAU and Jabil Circuit.

Diversification Opportunities for WPLAU and Jabil Circuit

-0.12

Correlation Coefficient

WPLAU  Jabil Circuit

Good diversification

The 3 months correlation between WPLAU and Jabil is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding WPLAU 365 05 MAR 25 and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit and WPLAU 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 WPLAU 365 05 MAR 25 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 WPLAU i.e., WPLAU and Jabil Circuit go up and down completely randomly.

Pair Corralation between WPLAU and Jabil Circuit

Assuming the 90 days trading horizon WPLAU is expected to generate 20.06 times less return on investment than Jabil Circuit. But when comparing it to its historical volatility, WPLAU 365 05 MAR 25 is 32.88 times less risky than Jabil Circuit. It trades about 0.2 of its potential returns per unit of risk. Jabil Circuit is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  13,768  in Jabil Circuit on October 7, 2024 and sell it today you would earn a total of  1,198  from holding Jabil Circuit or generate 8.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	56.1%
Values	Daily Returns

WPLAU 365 05 MAR 25  vs.  Jabil Circuit

WPLAU 365 05

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WPLAU 365 05 MAR 25 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, WPLAU is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Jabil Circuit

Risk-Adjusted Performance

14 of 100

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.

Pair Trading with WPLAU and Jabil Circuit

The main advantage of trading using opposite WPLAU and Jabil Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WPLAU 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 WPLAU 365 05 MAR 25 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.