Correlation Between Celestica and Jabil Circuit
Can any of the company-specific risk be diversified away by investing in both Celestica 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 Celestica and Jabil Circuit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celestica and Jabil Circuit, you can compare the effects of market volatilities on Celestica 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 Celestica with a short position of Jabil Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and Jabil Circuit.
Diversification Opportunities for Celestica and Jabil Circuit
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Celestica and Jabil is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit and Celestica 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 Celestica 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 Celestica i.e., Celestica and Jabil Circuit go up and down completely randomly.
Pair Corralation between Celestica and Jabil Circuit
Considering the 90-day investment horizon Celestica is expected to generate 1.59 times more return on investment than Jabil Circuit. However, Celestica is 1.59 times more volatile than Jabil Circuit. It trades about 0.11 of its potential returns per unit of risk. Jabil Circuit is currently generating about 0.04 per unit of risk. If you would invest 5,941 in Celestica on August 24, 2024 and sell it today you would earn a total of 3,203 from holding Celestica or generate 53.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celestica vs. Jabil Circuit
Performance |
| Timeline |
| Celestica |
| Jabil Circuit |
Celestica and Jabil Circuit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celestica and Jabil Circuit
The main advantage of trading using opposite Celestica and Jabil Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celestica 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.| Celestica vs. Plexus Corp | Celestica vs. Benchmark Electronics | Celestica vs. Flex | Celestica vs. Jabil Circuit |
| Jabil Circuit vs. Sanmina | Jabil Circuit vs. Celestica | Jabil Circuit vs. Plexus Corp | Jabil Circuit vs. Fabrinet |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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