Correlation Between JBS SA and China Mengniu
Can any of the company-specific risk be diversified away by investing in both JBS SA and China Mengniu 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 Mengniu 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 Mengniu Dairy, you can compare the effects of market volatilities on JBS SA and China Mengniu 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 Mengniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBS SA and China Mengniu.
Diversification Opportunities for JBS SA and China Mengniu
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JBS and China is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding JBS SA and China Mengniu Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mengniu Dairy 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 Mengniu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Mengniu Dairy has no effect on the direction of JBS SA i.e., JBS SA and China Mengniu go up and down completely randomly.
Pair Corralation between JBS SA and China Mengniu
If you would invest 835.00 in JBS SA on February 5, 2024 and sell it today you would earn a total of 110.00 from holding JBS SA or generate 13.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
JBS SA vs. China Mengniu Dairy
Performance |
Timeline |
JBS SA |
China Mengniu Dairy |
JBS SA and China Mengniu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JBS SA and China Mengniu
The main advantage of trading using opposite JBS SA and China Mengniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBS SA position performs unexpectedly, China Mengniu 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 Mengniu will offset losses from the drop in China Mengniu's long position.The idea behind JBS SA and China Mengniu Dairy 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.China Mengniu vs. Bank Mandiri Persero | China Mengniu vs. Astra International Tbk | China Mengniu vs. United Tractors Tbk |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
Global Correlations Find global opportunities by holding instruments from different markets | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |