Correlation Between Jabil Circuit and CTS
Can any of the company-specific risk be diversified away by investing in both Jabil Circuit and CTS 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 CTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jabil Circuit and CTS Corporation, you can compare the effects of market volatilities on Jabil Circuit and CTS 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 CTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jabil Circuit and CTS.
Diversification Opportunities for Jabil Circuit and CTS
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jabil and CTS is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation 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 CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and CTS go up and down completely randomly.
Pair Corralation between Jabil Circuit and CTS
Considering the 90-day investment horizon Jabil Circuit is expected to generate 1.18 times more return on investment than CTS. However, Jabil Circuit is 1.18 times more volatile than CTS Corporation. It trades about 0.1 of its potential returns per unit of risk. CTS Corporation is currently generating about -0.29 per unit of risk. If you would invest 16,290 in Jabil Circuit on November 18, 2024 and sell it today you would earn a total of 675.00 from holding Jabil Circuit or generate 4.14% 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. CTS Corp.
Performance |
| Timeline |
| Jabil Circuit |
| CTS Corporation |
Jabil Circuit and CTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jabil Circuit and CTS
The main advantage of trading using opposite Jabil Circuit and CTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jabil Circuit position performs unexpectedly, CTS 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 CTS will offset losses from the drop in CTS's long position.| Jabil Circuit vs. Sanmina | Jabil Circuit vs. Celestica | Jabil Circuit vs. Plexus Corp | Jabil Circuit vs. Fabrinet |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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