Correlation Between JABIL CIRCUIT and Home Depot
Can any of the company-specific risk be diversified away by investing in both JABIL CIRCUIT and Home Depot 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 Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JABIL CIRCUIT and The Home Depot, you can compare the effects of market volatilities on JABIL CIRCUIT and Home Depot 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 Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of JABIL CIRCUIT and Home Depot.
Diversification Opportunities for JABIL CIRCUIT and Home Depot
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JABIL and Home is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding JABIL CIRCUIT and The Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot 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 Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of JABIL CIRCUIT i.e., JABIL CIRCUIT and Home Depot go up and down completely randomly.
Pair Corralation between JABIL CIRCUIT and Home Depot
Assuming the 90 days trading horizon JABIL CIRCUIT is expected to generate 1.22 times less return on investment than Home Depot. In addition to that, JABIL CIRCUIT is 1.48 times more volatile than The Home Depot. It trades about 0.26 of its total potential returns per unit of risk. The Home Depot is currently generating about 0.47 per unit of volatility. If you would invest 35,850 in The Home Depot on September 1, 2024 and sell it today you would earn a total of 4,885 from holding The Home Depot or generate 13.63% 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. The Home Depot
Performance |
| Timeline |
| JABIL CIRCUIT |
| Home Depot |
JABIL CIRCUIT and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JABIL CIRCUIT and Home Depot
The main advantage of trading using opposite JABIL CIRCUIT and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JABIL CIRCUIT position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.| JABIL CIRCUIT vs. WisdomTree Investments | JABIL CIRCUIT vs. American Eagle Outfitters | JABIL CIRCUIT vs. REINET INVESTMENTS SCA | JABIL CIRCUIT vs. AOYAMA TRADING |
| Home Depot vs. The Home Depot | Home Depot vs. HORNBACH Baumarkt AG | Home Depot vs. WICKES GROUP PLC | Home Depot vs. TOPPS TILES PLC |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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