Correlation Between Jabil Circuit and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Jabil Circuit and NETGEAR 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 NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jabil Circuit and NETGEAR, you can compare the effects of market volatilities on Jabil Circuit and NETGEAR 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 NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jabil Circuit and NETGEAR.
Diversification Opportunities for Jabil Circuit and NETGEAR
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jabil and NETGEAR is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR 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 NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and NETGEAR go up and down completely randomly.
Pair Corralation between Jabil Circuit and NETGEAR
Considering the 90-day investment horizon Jabil Circuit is expected to generate 2.38 times less return on investment than NETGEAR. But when comparing it to its historical volatility, Jabil Circuit is 1.11 times less risky than NETGEAR. It trades about 0.16 of its potential returns per unit of risk. NETGEAR is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,044 in NETGEAR on August 30, 2024 and sell it today you would earn a total of 360.00 from holding NETGEAR or generate 17.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jabil Circuit vs. NETGEAR
Performance |
| Timeline |
| Jabil Circuit |
| NETGEAR |
Jabil Circuit and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jabil Circuit and NETGEAR
The main advantage of trading using opposite Jabil Circuit and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jabil Circuit position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR's long position.| Jabil Circuit vs. Sanmina | Jabil Circuit vs. Celestica | Jabil Circuit vs. Plexus Corp | Jabil Circuit vs. Fabrinet |
| NETGEAR vs. Knowles Cor | NETGEAR vs. AudioCodes | NETGEAR vs. Ituran Location and | NETGEAR vs. Aviat Networks |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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