Correlation Between Plexus Corp and Jabil Circuit
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and Jabil Circuit 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 Plexus Corp and Jabil Circuit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Jabil Circuit, you can compare the effects of market volatilities on Plexus Corp and Jabil Circuit 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 Plexus Corp with a short position of Jabil Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Jabil Circuit.
Diversification Opportunities for Plexus Corp and Jabil Circuit
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Plexus and Jabil is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit and Plexus Corp 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 Plexus Corp are associated (or correlated) with Jabil Circuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jabil Circuit has no effect on the direction of Plexus Corp i.e., Plexus Corp and Jabil Circuit go up and down completely randomly.
Pair Corralation between Plexus Corp and Jabil Circuit
Given the investment horizon of 90 days Plexus Corp is expected to generate 1.56 times less return on investment than Jabil Circuit. But when comparing it to its historical volatility, Plexus Corp is 1.22 times less risky than Jabil Circuit. It trades about 0.05 of its potential returns per unit of risk. Jabil Circuit is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,046 in Jabil Circuit on August 24, 2024 and sell it today you would earn a total of 6,018 from holding Jabil Circuit or generate 85.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plexus Corp vs. Jabil Circuit
Performance |
| Timeline |
| Plexus Corp |
| Jabil Circuit |
Plexus Corp and Jabil Circuit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and Jabil Circuit
The main advantage of trading using opposite Plexus Corp and Jabil Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, Jabil Circuit 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 Jabil Circuit will offset losses from the drop in Jabil Circuit's long position.| Plexus Corp vs. Celestica | Plexus Corp vs. Benchmark Electronics | Plexus Corp vs. Flex | Plexus Corp vs. Jabil Circuit |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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