Correlation Between JBS SA and J J

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

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

Diversification Opportunities for JBS SA and J J

0.04

Correlation Coefficient

JBS SA  J J

Significant diversification

The 3 months correlation between JBS and JJSF is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding JBS SA and J J Snack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J J Snack 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 J J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J J Snack has no effect on the direction of JBS SA i.e., JBS SA and J J go up and down completely randomly.

Pair Corralation between JBS SA and J J

Assuming the 90 days horizon JBS SA is expected to generate 2.31 times more return on investment than J J. However, JBS SA is 2.31 times more volatile than J J Snack. It trades about 0.09 of its potential returns per unit of risk. J J Snack is currently generating about -0.19 per unit of risk. If you would invest  1,207  in JBS SA on December 26, 2024 and sell it today you would earn a total of  212.00  from holding JBS SA or generate 17.56% return on investment over 90 days.

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

JBS SA  vs.  J J Snack

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 fairly uncertain basic indicators, JBS SA showed solid returns over the last few months and may actually be approaching a breakup point.

J J Snack

Risk-Adjusted Performance

Very Weak

Over the last 90 days J J Snack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with JBS SA and J J

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

The idea behind JBS SA and J J Snack 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.