Correlation Between Universal Stainless and Jabil Circuit

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

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

Diversification Opportunities for Universal Stainless and Jabil Circuit

0.0

Correlation Coefficient

Universal Stainless  Jabil Circuit

Pay attention - limited upside

The 3 months correlation between Universal and Jabil is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Universal Stainless Alloy and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit and Universal Stainless 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 Universal Stainless Alloy 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 Universal Stainless i.e., Universal Stainless and Jabil Circuit go up and down completely randomly.

Pair Corralation between Universal Stainless and Jabil Circuit

If you would invest  14,560  in Jabil Circuit on December 21, 2024 and sell it today you would lose (177.00) from holding Jabil Circuit or give up 1.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Universal Stainless Alloy  vs.  Jabil Circuit

Universal Stainless Alloy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Universal Stainless Alloy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Universal Stainless is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Jabil Circuit

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jabil Circuit has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Universal Stainless and Jabil Circuit

The main advantage of trading using opposite Universal Stainless and Jabil Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Stainless 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 Universal Stainless Alloy 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.