Correlation Between Wingstop and JBS NV

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

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

Diversification Opportunities for Wingstop and JBS NV

0.29

Correlation Coefficient

Wingstop  JBS NV

Modest diversification

The 3 months correlation between Wingstop and JBS is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Wingstop and JBS NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBS NV and Wingstop 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 Wingstop 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 Wingstop i.e., Wingstop and JBS NV go up and down completely randomly.

Pair Corralation between Wingstop and JBS NV

Given the investment horizon of 90 days Wingstop is expected to generate 1.06 times more return on investment than JBS NV. However, Wingstop is 1.06 times more volatile than JBS NV. It trades about 0.08 of its potential returns per unit of risk. JBS NV is currently generating about -0.03 per unit of risk. If you would invest  25,944  in Wingstop on May 1, 2025 and sell it today you would earn a total of  3,086  from holding Wingstop or generate 11.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	54.1%
Values	Daily Returns

Wingstop  vs.  JBS NV

Wingstop

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wingstop are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Wingstop reported solid returns over the last few months and may actually be approaching a breakup point.

JBS NV

Risk-Adjusted Performance

Very Weak

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 Wingstop and JBS NV

The main advantage of trading using opposite Wingstop and JBS NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wingstop 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 Wingstop 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.