Correlation Between Jabil and TTM Technologies
Can any of the company-specific risk be diversified away by investing in both Jabil and TTM Technologies 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 and TTM Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jabil Inc and TTM Technologies, you can compare the effects of market volatilities on Jabil and TTM Technologies 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 with a short position of TTM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jabil and TTM Technologies.
Diversification Opportunities for Jabil and TTM Technologies
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jabil and TTM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Inc and TTM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTM Technologies and Jabil 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 Inc are associated (or correlated) with TTM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTM Technologies has no effect on the direction of Jabil i.e., Jabil and TTM Technologies go up and down completely randomly.
Pair Corralation between Jabil and TTM Technologies
Assuming the 90 days horizon Jabil is expected to generate 1.42 times less return on investment than TTM Technologies. But when comparing it to its historical volatility, Jabil Inc is 1.02 times less risky than TTM Technologies. It trades about 0.2 of its potential returns per unit of risk. TTM Technologies is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,000 in TTM Technologies on September 4, 2024 and sell it today you would earn a total of 280.00 from holding TTM Technologies or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jabil Inc vs. TTM Technologies
Performance |
| Timeline |
| Jabil Inc |
| TTM Technologies |
Jabil and TTM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jabil and TTM Technologies
The main advantage of trading using opposite Jabil and TTM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jabil position performs unexpectedly, TTM Technologies 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 TTM Technologies will offset losses from the drop in TTM Technologies' long position.| Jabil vs. SOLSTAD OFFSHORE NK | Jabil vs. CSSC Offshore Marine | Jabil vs. Clearside Biomedical | Jabil vs. TITANIUM TRANSPORTGROUP |
| TTM Technologies vs. EBRO FOODS | TTM Technologies vs. Cal Maine Foods | TTM Technologies vs. KB HOME | TTM Technologies vs. Tyson Foods |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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