Correlation Between Jabil Circuit and Fabrinet

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Can any of the company-specific risk be diversified away by investing in both Jabil Circuit and Fabrinet 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 Fabrinet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jabil Circuit and Fabrinet, you can compare the effects of market volatilities on Jabil Circuit and Fabrinet 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 Fabrinet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jabil Circuit and Fabrinet.

Diversification Opportunities for Jabil Circuit and Fabrinet

0.41
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Jabil and Fabrinet is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and Fabrinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabrinet 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 Fabrinet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabrinet has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and Fabrinet go up and down completely randomly.

Pair Corralation between Jabil Circuit and Fabrinet

Considering the 90-day investment horizon Jabil Circuit is expected to generate 1.23 times more return on investment than Fabrinet. However, Jabil Circuit is 1.23 times more volatile than Fabrinet. It trades about -0.05 of its potential returns per unit of risk. Fabrinet is currently generating about -0.08 per unit of risk. If you would invest  14,270  in Jabil Circuit on December 29, 2023 and sell it today you would lose (875.00) from holding Jabil Circuit or give up 6.13% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Jabil Circuit  vs.  Fabrinet

 Performance 
       Timeline  
Jabil Circuit 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Circuit are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent fundamental drivers, Jabil Circuit may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Fabrinet 

Risk-Adjusted Performance

1 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Fabrinet are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Fabrinet is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Jabil Circuit and Fabrinet Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jabil Circuit and Fabrinet

The main advantage of trading using opposite Jabil Circuit and Fabrinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jabil Circuit position performs unexpectedly, Fabrinet 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 Fabrinet will offset losses from the drop in Fabrinet's long position.
The idea behind Jabil Circuit and Fabrinet 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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