Correlation Between Jabil Circuit and ADC Therapeutics
Can any of the company-specific risk be diversified away by investing in both Jabil Circuit and ADC Therapeutics 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 ADC Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jabil Circuit and ADC Therapeutics SA, you can compare the effects of market volatilities on Jabil Circuit and ADC Therapeutics 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 ADC Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jabil Circuit and ADC Therapeutics.
Diversification Opportunities for Jabil Circuit and ADC Therapeutics
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jabil and ADC is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and ADC Therapeutics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADC Therapeutics 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 ADC Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADC Therapeutics has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and ADC Therapeutics go up and down completely randomly.
Pair Corralation between Jabil Circuit and ADC Therapeutics
Considering the 90-day investment horizon Jabil Circuit is expected to generate 0.64 times more return on investment than ADC Therapeutics. However, Jabil Circuit is 1.55 times less risky than ADC Therapeutics. It trades about 0.27 of its potential returns per unit of risk. ADC Therapeutics SA is currently generating about -0.19 per unit of risk. If you would invest 14,283 in Jabil Circuit on November 2, 2024 and sell it today you would earn a total of 1,815 from holding Jabil Circuit or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jabil Circuit vs. ADC Therapeutics SA
Performance |
| Timeline |
| Jabil Circuit |
| ADC Therapeutics |
Jabil Circuit and ADC Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jabil Circuit and ADC Therapeutics
The main advantage of trading using opposite Jabil Circuit and ADC Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jabil Circuit position performs unexpectedly, ADC Therapeutics 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 ADC Therapeutics will offset losses from the drop in ADC Therapeutics' long position.| Jabil Circuit vs. Sanmina | Jabil Circuit vs. Celestica | Jabil Circuit vs. Plexus Corp | Jabil Circuit vs. Fabrinet |
| ADC Therapeutics vs. Passage Bio | ADC Therapeutics vs. Black Diamond Therapeutics | ADC Therapeutics vs. Alector | ADC Therapeutics vs. Century Therapeutics |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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