Correlation Between CARSALES and JABIL CIRCUIT
Can any of the company-specific risk be diversified away by investing in both CARSALES 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 CARSALES and JABIL CIRCUIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CARSALESCOM and JABIL CIRCUIT, you can compare the effects of market volatilities on CARSALES 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 CARSALES with a short position of JABIL CIRCUIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARSALES and JABIL CIRCUIT.
Diversification Opportunities for CARSALES and JABIL CIRCUIT
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CARSALES and JABIL is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding CARSALESCOM and JABIL CIRCUIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JABIL CIRCUIT and CARSALES 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 CARSALESCOM 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 CARSALES i.e., CARSALES and JABIL CIRCUIT go up and down completely randomly.
Pair Corralation between CARSALES and JABIL CIRCUIT
Assuming the 90 days trading horizon CARSALESCOM is expected to generate 0.69 times more return on investment than JABIL CIRCUIT. However, CARSALESCOM is 1.44 times less risky than JABIL CIRCUIT. It trades about 0.09 of its potential returns per unit of risk. JABIL CIRCUIT is currently generating about 0.05 per unit of risk. If you would invest 2,104 in CARSALESCOM on September 3, 2024 and sell it today you would earn a total of 456.00 from holding CARSALESCOM or generate 21.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CARSALESCOM vs. JABIL CIRCUIT
Performance |
| Timeline |
| CARSALESCOM |
| JABIL CIRCUIT |
CARSALES and JABIL CIRCUIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARSALES and JABIL CIRCUIT
The main advantage of trading using opposite CARSALES and JABIL CIRCUIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARSALES 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.| CARSALES vs. COMBA TELECOM SYST | CARSALES vs. SENECA FOODS A | CARSALES vs. Entravision Communications | CARSALES vs. JJ SNACK FOODS |
| JABIL CIRCUIT vs. CARSALESCOM | JABIL CIRCUIT vs. ELMOS SEMICONDUCTOR | JABIL CIRCUIT vs. YATRA ONLINE DL 0001 | JABIL CIRCUIT vs. JAPAN AIRLINES |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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