Correlation Between JBS ON and Mxima Renda
Can any of the company-specific risk be diversified away by investing in both JBS ON and Mxima Renda 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 ON and Mxima Renda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JBS ON NM and Mxima Renda Corporativa, you can compare the effects of market volatilities on JBS ON and Mxima Renda 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 ON with a short position of Mxima Renda. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBS ON and Mxima Renda.
Diversification Opportunities for JBS ON and Mxima Renda
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between JBS and Mxima is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding JBS ON NM and Mxima Renda Corporativa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mxima Renda Corporativa and JBS ON 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 ON NM are associated (or correlated) with Mxima Renda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mxima Renda Corporativa has no effect on the direction of JBS ON i.e., JBS ON and Mxima Renda go up and down completely randomly.
Pair Corralation between JBS ON and Mxima Renda
Assuming the 90 days trading horizon JBS ON NM is expected to generate 0.81 times more return on investment than Mxima Renda. However, JBS ON NM is 1.24 times less risky than Mxima Renda. It trades about 0.07 of its potential returns per unit of risk. Mxima Renda Corporativa is currently generating about -0.03 per unit of risk. If you would invest 1,722 in JBS ON NM on November 28, 2024 and sell it today you would earn a total of 1,360 from holding JBS ON NM or generate 78.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBS ON NM vs. Mxima Renda Corporativa
Performance |
| Timeline |
| JBS ON NM |
| Mxima Renda Corporativa |
JBS ON and Mxima Renda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBS ON and Mxima Renda
The main advantage of trading using opposite JBS ON and Mxima Renda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBS ON position performs unexpectedly, Mxima Renda 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 Mxima Renda will offset losses from the drop in Mxima Renda's long position.| JBS ON vs. Patria Investments Limited | JBS ON vs. G2D Investments | JBS ON vs. Global X Funds | JBS ON vs. ON Semiconductor |
| Mxima Renda vs. Energisa SA | Mxima Renda vs. BTG Pactual Logstica | Mxima Renda vs. Plano Plano Desenvolvimento | Mxima Renda vs. Ares Management |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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