Correlation Between JBS SA and Kellanova
Can any of the company-specific risk be diversified away by investing in both JBS SA and Kellanova 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 Kellanova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JBS SA and Kellanova, you can compare the effects of market volatilities on JBS SA and Kellanova 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 Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBS SA and Kellanova.
Diversification Opportunities for JBS SA and Kellanova
Average diversification
The 3 months correlation between JBS and Kellanova is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding JBS SA and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova 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 Kellanova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellanova has no effect on the direction of JBS SA i.e., JBS SA and Kellanova go up and down completely randomly.
Pair Corralation between JBS SA and Kellanova
Assuming the 90 days horizon JBS SA is expected to generate 10.23 times more return on investment than Kellanova. However, JBS SA is 10.23 times more volatile than Kellanova. It trades about 0.03 of its potential returns per unit of risk. Kellanova is currently generating about 0.11 per unit of risk. If you would invest 1,223 in JBS SA on September 4, 2024 and sell it today you would earn a total of 37.00 from holding JBS SA or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBS SA vs. Kellanova
Performance |
| Timeline |
| JBS SA |
| Kellanova |
JBS SA and Kellanova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBS SA and Kellanova
The main advantage of trading using opposite JBS SA and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBS SA position performs unexpectedly, Kellanova 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 Kellanova will offset losses from the drop in Kellanova's long position.| JBS SA vs. Kellanova | JBS SA vs. Lancaster Colony | JBS SA vs. The A2 Milk | JBS SA vs. Artisan Consumer Goods |
| Kellanova vs. Campbell Soup | Kellanova vs. ConAgra Foods | Kellanova vs. Hormel Foods | Kellanova vs. Kraft Heinz Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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