Correlation Between Jabil Circuit and Bayer AG
Can any of the company-specific risk be diversified away by investing in both Jabil Circuit and Bayer AG 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 Bayer AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jabil Circuit and Bayer AG, you can compare the effects of market volatilities on Jabil Circuit and Bayer AG 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 Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jabil Circuit and Bayer AG.
Diversification Opportunities for Jabil Circuit and Bayer AG
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jabil and Bayer is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and Bayer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG 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 Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and Bayer AG go up and down completely randomly.
Pair Corralation between Jabil Circuit and Bayer AG
Considering the 90-day investment horizon Jabil Circuit is expected to generate 1.07 times more return on investment than Bayer AG. However, Jabil Circuit is 1.07 times more volatile than Bayer AG. It trades about 0.07 of its potential returns per unit of risk. Bayer AG is currently generating about -0.08 per unit of risk. If you would invest 6,794 in Jabil Circuit on September 5, 2024 and sell it today you would earn a total of 6,756 from holding Jabil Circuit or generate 99.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
Jabil Circuit vs. Bayer AG
Performance |
| Timeline |
| Jabil Circuit |
| Bayer AG |
Jabil Circuit and Bayer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jabil Circuit and Bayer AG
The main advantage of trading using opposite Jabil Circuit and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jabil Circuit position performs unexpectedly, Bayer AG 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 Bayer AG will offset losses from the drop in Bayer AG's long position.| Jabil Circuit vs. Fabrinet | Jabil Circuit vs. Kimball Electronics | Jabil Circuit vs. Knowles Cor | Jabil Circuit vs. Ubiquiti Networks |
| Bayer AG vs. Jabil Circuit | Bayer AG vs. Dave Busters Entertainment | Bayer AG vs. Bel Fuse A | Bayer AG vs. Arrow Electronics |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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