Correlation Between JBS SA and China Feihe
Can any of the company-specific risk be diversified away by investing in both JBS SA and China Feihe 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 China Feihe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JBS SA and China Feihe Limited, you can compare the effects of market volatilities on JBS SA and China Feihe 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 China Feihe. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBS SA and China Feihe.
Diversification Opportunities for JBS SA and China Feihe
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JBS and China is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding JBS SA and China Feihe Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Feihe 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 China Feihe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Feihe Limited has no effect on the direction of JBS SA i.e., JBS SA and China Feihe go up and down completely randomly.
Pair Corralation between JBS SA and China Feihe
Assuming the 90 days horizon JBS SA is expected to under-perform the China Feihe. But the otc stock apears to be less risky and, when comparing its historical volatility, JBS SA is 3.28 times less risky than China Feihe. The otc stock trades about -0.01 of its potential returns per unit of risk. The China Feihe Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 41.00 in China Feihe Limited on October 24, 2024 and sell it today you would earn a total of 21.00 from holding China Feihe Limited or generate 51.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.78% |
| Values | Daily Returns |
JBS SA vs. China Feihe Limited
Performance |
| Timeline |
| JBS SA |
| China Feihe Limited |
JBS SA and China Feihe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBS SA and China Feihe
The main advantage of trading using opposite JBS SA and China Feihe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBS SA position performs unexpectedly, China Feihe 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 China Feihe will offset losses from the drop in China Feihe's long position.| JBS SA vs. BRF SA ADR | JBS SA vs. Natures Sunshine Products | JBS SA vs. Marfrig Global Foods | JBS SA vs. Bridgford Foods |
| China Feihe vs. WH Group Limited | China Feihe vs. BG Foods | China Feihe vs. JBS SA | China Feihe vs. Marfrig Global 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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