Correlation Between JBS SA and Excelsior Alimentos
Can any of the company-specific risk be diversified away by investing in both JBS SA and Excelsior Alimentos 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 Excelsior Alimentos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JBS SA and Excelsior Alimentos SA, you can compare the effects of market volatilities on JBS SA and Excelsior Alimentos 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 Excelsior Alimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBS SA and Excelsior Alimentos.
Diversification Opportunities for JBS SA and Excelsior Alimentos
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JBS and Excelsior is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding JBS SA and Excelsior Alimentos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelsior Alimentos 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 Excelsior Alimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelsior Alimentos has no effect on the direction of JBS SA i.e., JBS SA and Excelsior Alimentos go up and down completely randomly.
Pair Corralation between JBS SA and Excelsior Alimentos
Assuming the 90 days trading horizon JBS SA is expected to generate 18.65 times more return on investment than Excelsior Alimentos. However, JBS SA is 18.65 times more volatile than Excelsior Alimentos SA. It trades about 0.19 of its potential returns per unit of risk. Excelsior Alimentos SA is currently generating about -0.06 per unit of risk. If you would invest 3,448 in JBS SA on September 2, 2024 and sell it today you would earn a total of 284.00 from holding JBS SA or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBS SA vs. Excelsior Alimentos SA
Performance |
| Timeline |
| JBS SA |
| Excelsior Alimentos |
JBS SA and Excelsior Alimentos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBS SA and Excelsior Alimentos
The main advantage of trading using opposite JBS SA and Excelsior Alimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBS SA position performs unexpectedly, Excelsior Alimentos 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 Excelsior Alimentos will offset losses from the drop in Excelsior Alimentos' long position.The idea behind JBS SA and Excelsior Alimentos 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.| Excelsior Alimentos vs. Minupar Participaes SA | Excelsior Alimentos vs. Grazziotin SA | Excelsior Alimentos vs. Banco da Amaznia | Excelsior Alimentos vs. Grazziotin SA |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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