Correlation Between Eltek and JBS NV

Can any of the company-specific risk be diversified away by investing in both Eltek and JBS NV 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 Eltek and JBS NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eltek and JBS NV, you can compare the effects of market volatilities on Eltek and JBS NV 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 Eltek with a short position of JBS NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eltek and JBS NV.

Diversification Opportunities for Eltek and JBS NV

-0.05

Correlation Coefficient

Eltek  JBS NV

Good diversification

The 3 months correlation between Eltek and JBS is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Eltek and JBS NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBS NV and Eltek 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 Eltek are associated (or correlated) with JBS NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBS NV has no effect on the direction of Eltek i.e., Eltek and JBS NV go up and down completely randomly.

Pair Corralation between Eltek and JBS NV

Given the investment horizon of 90 days Eltek is expected to under-perform the JBS NV. But the stock apears to be less risky and, when comparing its historical volatility, Eltek is 1.08 times less risky than JBS NV. The stock trades about -0.02 of its potential returns per unit of risk. The JBS NV is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,405  in JBS NV on May 8, 2025 and sell it today you would lose (13.00) from holding JBS NV or give up 0.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	62.3%
Values	Daily Returns

Eltek  vs.  JBS NV

Eltek

Risk-Adjusted Performance

Weak

Over the last 90 days Eltek has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Eltek is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

JBS NV

Risk-Adjusted Performance

Weakest

Over the last 90 days JBS NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, JBS NV is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Eltek and JBS NV

The main advantage of trading using opposite Eltek and JBS NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eltek position performs unexpectedly, JBS NV 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 JBS NV will offset losses from the drop in JBS NV's long position.

The idea behind Eltek and JBS NV 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.