Correlation Between Premier Foods and JBS SA
Can any of the company-specific risk be diversified away by investing in both Premier Foods 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 Premier Foods and JBS SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Foods plc and JBS SA, you can compare the effects of market volatilities on Premier Foods 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 Premier Foods with a short position of JBS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Foods and JBS SA.
Diversification Opportunities for Premier Foods and JBS SA
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Premier and JBS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Premier Foods plc and JBS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBS SA and Premier Foods 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 Premier Foods plc 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 Premier Foods i.e., Premier Foods and JBS SA go up and down completely randomly.
Pair Corralation between Premier Foods and JBS SA
Assuming the 90 days horizon Premier Foods plc is expected to generate 1.13 times more return on investment than JBS SA. However, Premier Foods is 1.13 times more volatile than JBS SA. It trades about 0.14 of its potential returns per unit of risk. JBS SA is currently generating about 0.07 per unit of risk. If you would invest 178.00 in Premier Foods plc on June 11, 2025 and sell it today you would earn a total of 97.00 from holding Premier Foods plc or generate 54.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 28.61% |
| Values | Daily Returns |
Premier Foods plc vs. JBS SA
Performance |
| Timeline |
| Premier Foods plc |
| JBS SA |
Premier Foods and JBS SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Foods and JBS SA
The main advantage of trading using opposite Premier Foods and JBS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Foods 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.| Premier Foods vs. Premier Foods Plc | Premier Foods vs. Torque Lifestyle Brands | Premier Foods vs. First Pacific | Premier Foods vs. First Pacific |
| JBS SA vs. BRF SA ADR | JBS SA vs. Natures Sunshine Products | JBS SA vs. Premier Foods plc | JBS SA vs. Marfrig Global Foods |
Check out your portfolio center.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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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