Correlation Between JBS SA and Aryzta AG
Can any of the company-specific risk be diversified away by investing in both JBS SA and Aryzta AG 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 JBS SA and Aryzta AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JBS SA and Aryzta AG PK, you can compare the effects of market volatilities on JBS SA and Aryzta AG 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 JBS SA with a short position of Aryzta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBS SA and Aryzta AG.
Diversification Opportunities for JBS SA and Aryzta AG
Very good diversification
The 3 months correlation between JBS and Aryzta is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding JBS SA and Aryzta AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aryzta AG PK and JBS 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 JBS SA are associated (or correlated) with Aryzta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aryzta AG PK has no effect on the direction of JBS SA i.e., JBS SA and Aryzta AG go up and down completely randomly.
Pair Corralation between JBS SA and Aryzta AG
Assuming the 90 days horizon JBS SA is expected to under-perform the Aryzta AG. But the otc stock apears to be less risky and, when comparing its historical volatility, JBS SA is 1.04 times less risky than Aryzta AG. The otc stock trades about -0.13 of its potential returns per unit of risk. The Aryzta AG PK is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Aryzta AG PK on December 4, 2024 and sell it today you would earn a total of 10.00 from holding Aryzta AG PK or generate 10.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
JBS SA vs. Aryzta AG PK
Performance |
Timeline |
JBS SA |
Aryzta AG PK |
JBS SA and Aryzta AG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JBS SA and Aryzta AG
The main advantage of trading using opposite JBS SA and Aryzta AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBS SA position performs unexpectedly, Aryzta AG 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 Aryzta AG will offset losses from the drop in Aryzta AG's long position.JBS SA vs. BRF SA ADR | JBS SA vs. Natures Sunshine Products | JBS SA vs. Marfrig Global Foods | JBS SA vs. Bridgford Foods |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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