Correlation Between J J and Cosan SA

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

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

Diversification Opportunities for J J and Cosan SA

-0.57

Correlation Coefficient

J J  Cosan SA

Excellent diversification

The 3 months correlation between JJSF and Cosan is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding J J Snack and Cosan SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosan SA ADR and J J 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 J J Snack are associated (or correlated) with Cosan SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosan SA ADR has no effect on the direction of J J i.e., J J and Cosan SA go up and down completely randomly.

Pair Corralation between J J and Cosan SA

Given the investment horizon of 90 days J J Snack is expected to generate 0.53 times more return on investment than Cosan SA. However, J J Snack is 1.88 times less risky than Cosan SA. It trades about 0.02 of its potential returns per unit of risk. Cosan SA ADR is currently generating about -0.06 per unit of risk. If you would invest  11,543  in J J Snack on April 9, 2025 and sell it today you would earn a total of  94.00  from holding J J Snack or generate 0.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

J J Snack  vs.  Cosan SA ADR

J J Snack

Risk-Adjusted Performance

Very Weak

Over the last 90 days J J Snack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Cosan SA ADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cosan SA ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Cosan SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with J J and Cosan SA

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

The idea behind J J Snack and Cosan SA ADR 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.