Correlation Between AstroNova and Jabil Circuit

Can any of the company-specific risk be diversified away by investing in both AstroNova 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 AstroNova and Jabil Circuit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AstroNova and Jabil Circuit, you can compare the effects of market volatilities on AstroNova 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 AstroNova with a short position of Jabil Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstroNova and Jabil Circuit.

Diversification Opportunities for AstroNova and Jabil Circuit

-0.32

Correlation Coefficient

AstroNova  Jabil Circuit

Very good diversification

The 3 months correlation between AstroNova and Jabil is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding AstroNova and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit and AstroNova 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 AstroNova 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 AstroNova i.e., AstroNova and Jabil Circuit go up and down completely randomly.

Pair Corralation between AstroNova and Jabil Circuit

Given the investment horizon of 90 days AstroNova is expected to generate 0.49 times more return on investment than Jabil Circuit. However, AstroNova is 2.03 times less risky than Jabil Circuit. It trades about -0.22 of its potential returns per unit of risk. Jabil Circuit is currently generating about -0.11 per unit of risk. If you would invest  1,786  in AstroNova on January 20, 2024 and sell it today you would lose (99.00) from holding AstroNova or give up 5.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

AstroNova  vs.  Jabil Circuit

AstroNova

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AstroNova has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AstroNova is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Jabil Circuit

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Circuit are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Jabil Circuit is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with AstroNova and Jabil Circuit

The main advantage of trading using opposite AstroNova and Jabil Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstroNova 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.

The idea behind AstroNova and Jabil Circuit pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.