Correlation Between JBS SA and Pettenati

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

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

Diversification Opportunities for JBS SA and Pettenati

-0.75

Correlation Coefficient

JBS SA  Pettenati

Pay attention - limited upside

The 3 months correlation between JBS and Pettenati is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding JBS SA and Pettenati SA Industria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pettenati SA Industria 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 Pettenati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pettenati SA Industria has no effect on the direction of JBS SA i.e., JBS SA and Pettenati go up and down completely randomly.

Pair Corralation between JBS SA and Pettenati

Assuming the 90 days trading horizon JBS SA is expected to generate 1.07 times more return on investment than Pettenati. However, JBS SA is 1.07 times more volatile than Pettenati SA Industria. It trades about 0.18 of its potential returns per unit of risk. Pettenati SA Industria is currently generating about -0.2 per unit of risk. If you would invest  3,490  in JBS SA on September 24, 2024 and sell it today you would earn a total of  261.00  from holding JBS SA or generate 7.48% return on investment over 90 days.

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

JBS SA  vs.  Pettenati SA Industria

JBS SA

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JBS SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JBS SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pettenati SA Industria

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pettenati SA Industria has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with JBS SA and Pettenati

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

The idea behind JBS SA and Pettenati SA Industria 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.