Correlation Between JBS SA and Designer Brands

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

By analyzing existing cross correlation between JBS SA and Designer Brands, you can compare the effects of market volatilities on JBS SA and Designer Brands 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 Designer Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBS SA and Designer Brands.

Diversification Opportunities for JBS SA and Designer Brands

-0.59

Correlation Coefficient

JBS SA  Designer Brands

Excellent diversification

The 3 months correlation between JBS and Designer is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding JBS SA and Designer Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Designer Brands 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 Designer Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Designer Brands has no effect on the direction of JBS SA i.e., JBS SA and Designer Brands go up and down completely randomly.

Pair Corralation between JBS SA and Designer Brands

Assuming the 90 days horizon JBS SA is expected to generate 0.34 times more return on investment than Designer Brands. However, JBS SA is 2.91 times less risky than Designer Brands. It trades about 0.4 of its potential returns per unit of risk. Designer Brands is currently generating about 0.07 per unit of risk. If you would invest  1,305  in JBS SA on July 21, 2025 and sell it today you would earn a total of  260.00  from holding JBS SA or generate 19.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	41.54%
Values	Daily Returns

JBS SA  vs.  Designer Brands

JBS SA

Risk-Adjusted Performance

High

Over the last 90 days JBS SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile basic indicators, JBS SA showed solid returns over the last few months and may actually be approaching a breakup point.

Designer Brands

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Designer Brands are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental drivers, Designer Brands demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JBS SA and Designer Brands

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

The idea behind JBS SA and Designer Brands 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.