Correlation Between Western Asset and Jabil Circuit
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Jabil Circuit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Investment and Jabil Circuit, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Jabil Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Jabil Circuit.
Diversification Opportunities for Western Asset and Jabil Circuit
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Jabil is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Investment and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit and Western Asset 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 Western Asset Investment 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 Western Asset i.e., Western Asset and Jabil Circuit go up and down completely randomly.
Pair Corralation between Western Asset and Jabil Circuit
Considering the 90-day investment horizon Western Asset Investment is expected to under-perform the Jabil Circuit. But the stock apears to be less risky and, when comparing its historical volatility, Western Asset Investment is 3.93 times less risky than Jabil Circuit. The stock trades about -0.09 of its potential returns per unit of risk. The Jabil Circuit is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 12,471 in Jabil Circuit on August 29, 2024 and sell it today you would earn a total of 801.00 from holding Jabil Circuit or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Investment vs. Jabil Circuit
Performance |
| Timeline |
| Western Asset Investment |
| Jabil Circuit |
Western Asset and Jabil Circuit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Jabil Circuit
The main advantage of trading using opposite Western Asset and Jabil Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Pioneer Floating Rate | Western Asset vs. The Gabelli Equity | Western Asset vs. Pioneer Municipal High | Western Asset vs. Nuveen Global High |
| 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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