Correlation Between Enphase Energy and Jabil Circuit
Can any of the company-specific risk be diversified away by investing in both Enphase Energy 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 Enphase Energy and Jabil Circuit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy and Jabil Circuit, you can compare the effects of market volatilities on Enphase Energy 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 Enphase Energy with a short position of Jabil Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy and Jabil Circuit.
Diversification Opportunities for Enphase Energy and Jabil Circuit
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enphase and Jabil is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit and Enphase Energy 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 Enphase Energy 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 Enphase Energy i.e., Enphase Energy and Jabil Circuit go up and down completely randomly.
Pair Corralation between Enphase Energy and Jabil Circuit
Given the investment horizon of 90 days Enphase Energy is expected to under-perform the Jabil Circuit. In addition to that, Enphase Energy is 1.64 times more volatile than Jabil Circuit. It trades about -0.02 of its total potential returns per unit of risk. Jabil Circuit is currently generating about 0.03 per unit of volatility. If you would invest 11,501 in Jabil Circuit on August 26, 2024 and sell it today you would earn a total of 1,611 from holding Jabil Circuit or generate 14.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enphase Energy vs. Jabil Circuit
Performance |
| Timeline |
| Enphase Energy |
| Jabil Circuit |
Enphase Energy and Jabil Circuit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enphase Energy and Jabil Circuit
The main advantage of trading using opposite Enphase Energy and Jabil Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy 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 Enphase Energy 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.| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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