Correlation Between JBS SA and WH Group

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

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

Diversification Opportunities for JBS SA and WH Group

0.12

Correlation Coefficient

JBS SA  WH Group

Average diversification

The 3 months correlation between JBS and WHGRF is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding JBS SA and WH Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group Limited 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 WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group Limited has no effect on the direction of JBS SA i.e., JBS SA and WH Group go up and down completely randomly.

Pair Corralation between JBS SA and WH Group

Assuming the 90 days horizon JBS SA is expected to generate 2.13 times more return on investment than WH Group. However, JBS SA is 2.13 times more volatile than WH Group Limited. It trades about 0.06 of its potential returns per unit of risk. WH Group Limited is currently generating about 0.06 per unit of risk. If you would invest  1,247  in JBS SA on December 19, 2024 and sell it today you would earn a total of  142.00  from holding JBS SA or generate 11.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

JBS SA  vs.  WH Group Limited

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

WH Group Limited

Risk-Adjusted Performance

Insignificant

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

Pair Trading with JBS SA and WH Group

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

The idea behind JBS SA and WH Group Limited 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.