Correlation Between JBS SA and Minerva SA
Can any of the company-specific risk be diversified away by investing in both JBS SA and Minerva 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 JBS SA and Minerva SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JBS SA and Minerva SA, you can compare the effects of market volatilities on JBS SA and Minerva 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 JBS SA with a short position of Minerva SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBS SA and Minerva SA.
Diversification Opportunities for JBS SA and Minerva SA
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between JBS and Minerva is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding JBS SA and Minerva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerva SA 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 Minerva SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerva SA has no effect on the direction of JBS SA i.e., JBS SA and Minerva SA go up and down completely randomly.
Pair Corralation between JBS SA and Minerva SA
Assuming the 90 days trading horizon JBS SA is expected to generate 1.22 times less return on investment than Minerva SA. But when comparing it to its historical volatility, JBS SA is 1.12 times less risky than Minerva SA. It trades about 0.05 of its potential returns per unit of risk. Minerva SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 562.00 in Minerva SA on August 27, 2024 and sell it today you would earn a total of 12.00 from holding Minerva SA or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBS SA vs. Minerva SA
Performance |
| Timeline |
| JBS SA |
| Minerva SA |
JBS SA and Minerva SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBS SA and Minerva SA
The main advantage of trading using opposite JBS SA and Minerva SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBS SA position performs unexpectedly, Minerva 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 Minerva SA will offset losses from the drop in Minerva SA's long position.The idea behind JBS SA and Minerva 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.| Minerva SA vs. Marfrig Global Foods | Minerva SA vs. JBS SA | Minerva SA vs. BRF SA | Minerva SA vs. SLC Agrcola 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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