Correlation Between Jabil Circuit and Evolution Mining

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

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

Diversification Opportunities for Jabil Circuit and Evolution Mining

-0.16

Correlation Coefficient

Jabil Circuit  Evolution Mining

Good diversification

The 3 months correlation between Jabil and Evolution is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Jabil Circuit and Evolution Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Jabil Circuit i.e., Jabil Circuit and Evolution Mining go up and down completely randomly.

Pair Corralation between Jabil Circuit and Evolution Mining

Considering the 90-day investment horizon Jabil Circuit is expected to generate 0.6 times more return on investment than Evolution Mining. However, Jabil Circuit is 1.67 times less risky than Evolution Mining. It trades about 0.08 of its potential returns per unit of risk. Evolution Mining is currently generating about 0.04 per unit of risk. If you would invest  6,505  in Jabil Circuit on September 26, 2024 and sell it today you would earn a total of  8,272  from holding Jabil Circuit or generate 127.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.18%
Values	Daily Returns

Jabil Circuit  vs.  Evolution Mining

Jabil Circuit

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jabil Circuit are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental drivers, Jabil Circuit disclosed solid returns over the last few months and may actually be approaching a breakup point.

Evolution Mining

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Jabil Circuit and Evolution Mining

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

The idea behind Jabil Circuit and Evolution Mining 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..