Correlation Between Hana Microelectronics and Jabil

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

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

Diversification Opportunities for Hana Microelectronics and Jabil

-0.34

Correlation Coefficient

Hana Microelectronics  Jabil

Very good diversification

The 3 months correlation between Hana and Jabil is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and Jabil Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Inc and Hana Microelectronics 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 Hana Microelectronics Public are associated (or correlated) with Jabil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jabil Inc has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and Jabil go up and down completely randomly.

Pair Corralation between Hana Microelectronics and Jabil

Assuming the 90 days trading horizon Hana Microelectronics Public is expected to generate 3.49 times more return on investment than Jabil. However, Hana Microelectronics is 3.49 times more volatile than Jabil Inc. It trades about 0.07 of its potential returns per unit of risk. Jabil Inc is currently generating about 0.08 per unit of risk. If you would invest  14.00  in Hana Microelectronics Public on September 23, 2024 and sell it today you would earn a total of  51.00  from holding Hana Microelectronics Public or generate 364.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hana Microelectronics Public  vs.  Jabil Inc

Hana Microelectronics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jabil Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jabil reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hana Microelectronics and Jabil

The main advantage of trading using opposite Hana Microelectronics and Jabil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Microelectronics position performs unexpectedly, Jabil 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 will offset losses from the drop in Jabil's long position.

The idea behind Hana Microelectronics Public and Jabil Inc 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.