Correlation Between JBS SA and Beyond Meat

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

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

Diversification Opportunities for JBS SA and Beyond Meat

-0.5

Correlation Coefficient

JBS SA  Beyond Meat

Very good diversification

The 3 months correlation between JBS and Beyond is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding JBS SA and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat 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 Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of JBS SA i.e., JBS SA and Beyond Meat go up and down completely randomly.

Pair Corralation between JBS SA and Beyond Meat

Assuming the 90 days trading horizon JBS SA is expected to generate 0.48 times more return on investment than Beyond Meat. However, JBS SA is 2.08 times less risky than Beyond Meat. It trades about 0.12 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.02 per unit of risk. If you would invest  3,287  in JBS SA on September 3, 2024 and sell it today you would earn a total of  445.00  from holding JBS SA or generate 13.54% return on investment over 90 days.

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

JBS SA  vs.  Beyond Meat

JBS SA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JBS SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JBS SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Beyond Meat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beyond Meat has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Beyond Meat is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JBS SA and Beyond Meat

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

The idea behind JBS SA and Beyond Meat 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.