Correlation Between JABIL CIRCUIT and Apple
Can any of the company-specific risk be diversified away by investing in both JABIL CIRCUIT and Apple 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 JABIL CIRCUIT and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JABIL CIRCUIT and Apple Inc, you can compare the effects of market volatilities on JABIL CIRCUIT and Apple 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 JABIL CIRCUIT with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of JABIL CIRCUIT and Apple.
Diversification Opportunities for JABIL CIRCUIT and Apple
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JABIL and Apple is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding JABIL CIRCUIT and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and JABIL CIRCUIT 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 JABIL CIRCUIT are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of JABIL CIRCUIT i.e., JABIL CIRCUIT and Apple go up and down completely randomly.
Pair Corralation between JABIL CIRCUIT and Apple
Assuming the 90 days trading horizon JABIL CIRCUIT is expected to generate 2.4 times less return on investment than Apple. In addition to that, JABIL CIRCUIT is 1.7 times more volatile than Apple Inc. It trades about 0.02 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.08 per unit of volatility. If you would invest 17,415 in Apple Inc on September 14, 2024 and sell it today you would earn a total of 6,200 from holding Apple Inc or generate 35.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JABIL CIRCUIT vs. Apple Inc
Performance |
| Timeline |
| JABIL CIRCUIT |
| Apple Inc |
JABIL CIRCUIT and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JABIL CIRCUIT and Apple
The main advantage of trading using opposite JABIL CIRCUIT and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JABIL CIRCUIT position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| JABIL CIRCUIT vs. Apple Inc | JABIL CIRCUIT vs. Apple Inc | JABIL CIRCUIT vs. Apple Inc | JABIL CIRCUIT vs. Apple Inc |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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