Correlation Between Minerva SA and JBS SA

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

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

Diversification Opportunities for Minerva SA and JBS SA

0.85

Correlation Coefficient

Minerva SA  JBS SA

Very poor diversification

The 3 months correlation between Minerva and JBS is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Minerva SA and JBS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBS SA and Minerva SA 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 Minerva SA are associated (or correlated) with JBS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBS SA has no effect on the direction of Minerva SA i.e., Minerva SA and JBS SA go up and down completely randomly.

Pair Corralation between Minerva SA and JBS SA

Assuming the 90 days trading horizon Minerva SA is expected to generate 1.1 times more return on investment than JBS SA. However, Minerva SA is 1.1 times more volatile than JBS SA. It trades about 0.11 of its potential returns per unit of risk. JBS SA is currently generating about 0.08 per unit of risk. If you would invest  509.00  in Minerva SA on December 30, 2024 and sell it today you would earn a total of  112.00  from holding Minerva SA or generate 22.0% return on investment over 90 days.

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

Minerva SA  vs.  JBS SA

Minerva SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Minerva SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Minerva SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

JBS SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JBS SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JBS SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Minerva SA and JBS SA

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

The idea behind Minerva SA and JBS SA 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.