Correlation Between Celgene and Jabil Circuit

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

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

Diversification Opportunities for Celgene and Jabil Circuit

0.0

Correlation Coefficient

Celgene  Jabil Circuit

Pay attention - limited upside

The 3 months correlation between Celgene and Jabil is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Celgene and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit and Celgene 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 Celgene 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 Celgene i.e., Celgene and Jabil Circuit go up and down completely randomly.

Pair Corralation between Celgene and Jabil Circuit

If you would invest (100.00) in Celgene on February 3, 2024 and sell it today you would earn a total of  100.00  from holding Celgene or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Celgene  vs.  Jabil Circuit

Celgene

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celgene has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Celgene is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Jabil Circuit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jabil Circuit has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Celgene and Jabil Circuit

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

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.