Correlation Between JBS SA and Mosaic

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

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

Diversification Opportunities for JBS SA and Mosaic

0.61

Correlation Coefficient

JBS SA  Mosaic

Poor diversification

The 3 months correlation between JBS and Mosaic is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding JBS SA and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic 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 Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of JBS SA i.e., JBS SA and Mosaic go up and down completely randomly.

Pair Corralation between JBS SA and Mosaic

Assuming the 90 days trading horizon JBS SA is expected to under-perform the Mosaic. But the stock apears to be less risky and, when comparing its historical volatility, JBS SA is 1.1 times less risky than Mosaic. The stock trades about -0.39 of its potential returns per unit of risk. The The Mosaic is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  2,649  in The Mosaic on October 15, 2024 and sell it today you would lose (129.00) from holding The Mosaic or give up 4.87% of portfolio value over 90 days.

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

JBS SA  vs.  The Mosaic

JBS SA

Risk-Adjusted Performance

6 of 100

OK

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 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Mosaic

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Mosaic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JBS SA and Mosaic

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

The idea behind JBS SA and The Mosaic 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.