Correlation Between Hypera SA and JBS SA

Can any of the company-specific risk be diversified away by investing in both Hypera 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 Hypera 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 Hypera SA and JBS SA, you can compare the effects of market volatilities on Hypera 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 Hypera SA with a short position of JBS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hypera SA and JBS SA.

Diversification Opportunities for Hypera SA and JBS SA

-0.23

Correlation Coefficient

Hypera SA  JBS SA

Very good diversification

The 3 months correlation between Hypera and JBS is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hypera SA and JBS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBS SA and Hypera 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 Hypera 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 Hypera SA i.e., Hypera SA and JBS SA go up and down completely randomly.

Pair Corralation between Hypera SA and JBS SA

Assuming the 90 days trading horizon Hypera SA is expected to generate 1.1 times less return on investment than JBS SA. But when comparing it to its historical volatility, Hypera SA is 2.0 times less risky than JBS SA. It trades about 0.11 of its potential returns per unit of risk. JBS SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,621  in JBS SA on December 27, 2024 and sell it today you would earn a total of  343.00  from holding JBS SA or generate 9.47% return on investment over 90 days.

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

Hypera SA  vs.  JBS SA

Hypera SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hypera SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hypera SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

JBS SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JBS SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JBS SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hypera SA and JBS SA

The main advantage of trading using opposite Hypera SA and JBS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hypera 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 Hypera 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 Transaction History module to view history of all your transactions and understand their impact on performance.