Correlation Between Sime Darby and JBS SA

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

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

Diversification Opportunities for Sime Darby and JBS SA

0.28

Correlation Coefficient

Sime Darby  JBS SA

Modest diversification

The 3 months correlation between Sime and JBS is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sime Darby Plantation and JBS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBS SA and Sime Darby 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 Sime Darby Plantation are associated (or correlated) with JBS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBS SA has no effect on the direction of Sime Darby i.e., Sime Darby and JBS SA go up and down completely randomly.

Pair Corralation between Sime Darby and JBS SA

If you would invest  103.00  in Sime Darby Plantation on July 26, 2025 and sell it today you would earn a total of  2.00  from holding Sime Darby Plantation or generate 1.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Sime Darby Plantation  vs.  JBS SA

Sime Darby Plantation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sime Darby Plantation are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sime Darby may actually be approaching a critical reversion point that can send shares even higher in November 2025.

JBS SA

Risk-Adjusted Performance

Strong

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.

Pair Trading with Sime Darby and JBS SA

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

The idea behind Sime Darby Plantation and JBS SA 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.