Correlation Between Jabil Circuit and Deswell Industries
Can any of the company-specific risk be diversified away by investing in both Jabil Circuit and Deswell Industries 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 Deswell Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jabil Circuit and Deswell Industries, you can compare the effects of market volatilities on Jabil Circuit and Deswell Industries 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 Deswell Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jabil Circuit and Deswell Industries.
Diversification Opportunities for Jabil Circuit and Deswell Industries
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jabil and Deswell is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and Deswell Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deswell Industries 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 Deswell Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deswell Industries has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and Deswell Industries go up and down completely randomly.
Pair Corralation between Jabil Circuit and Deswell Industries
Considering the 90-day investment horizon Jabil Circuit is expected to generate 1.42 times more return on investment than Deswell Industries. However, Jabil Circuit is 1.42 times more volatile than Deswell Industries. It trades about 0.13 of its potential returns per unit of risk. Deswell Industries is currently generating about 0.06 per unit of risk. If you would invest 12,471 in Jabil Circuit on August 27, 2024 and sell it today you would earn a total of 641.00 from holding Jabil Circuit or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jabil Circuit vs. Deswell Industries
Performance |
| Timeline |
| Jabil Circuit |
| Deswell Industries |
Jabil Circuit and Deswell Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jabil Circuit and Deswell Industries
The main advantage of trading using opposite Jabil Circuit and Deswell Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jabil Circuit position performs unexpectedly, Deswell Industries 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 Deswell Industries will offset losses from the drop in Deswell Industries' long position.| Jabil Circuit vs. Sanmina | Jabil Circuit vs. Celestica | Jabil Circuit vs. Plexus Corp | Jabil Circuit vs. Fabrinet |
| Deswell Industries vs. Plexus Corp | Deswell Industries vs. Benchmark Electronics | Deswell Industries vs. Jabil Circuit | Deswell Industries vs. Sanmina |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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