Correlation Between BRC and JBS SA
Can any of the company-specific risk be diversified away by investing in both BRC and JBS SA 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 BRC and JBS SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRC Inc and JBS SA, you can compare the effects of market volatilities on BRC and JBS SA 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 BRC with a short position of JBS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRC and JBS SA.
Diversification Opportunities for BRC and JBS SA
Good diversification
The 3 months correlation between BRC and JBS is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding BRC Inc and JBS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBS SA and BRC 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 BRC Inc are associated (or correlated) with JBS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBS SA has no effect on the direction of BRC i.e., BRC and JBS SA go up and down completely randomly.
Pair Corralation between BRC and JBS SA
Given the investment horizon of 90 days BRC Inc is expected to generate 0.71 times more return on investment than JBS SA. However, BRC Inc is 1.42 times less risky than JBS SA. It trades about 0.05 of its potential returns per unit of risk. JBS SA is currently generating about -0.22 per unit of risk. If you would invest 293.00 in BRC Inc on October 21, 2024 and sell it today you would earn a total of 5.00 from holding BRC Inc or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRC Inc vs. JBS SA
Performance |
| Timeline |
| BRC Inc |
| JBS SA |
BRC and JBS SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRC and JBS SA
The main advantage of trading using opposite BRC and JBS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRC position performs unexpectedly, JBS SA 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 JBS SA will offset losses from the drop in JBS SA's long position.The idea behind BRC Inc and JBS SA 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.| JBS SA vs. BRF SA ADR | JBS SA vs. Natures Sunshine Products | JBS SA vs. Marfrig Global Foods | JBS SA vs. Bridgford Foods |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |