Correlation Between Pilgrims Pride and JBS SA
Can any of the company-specific risk be diversified away by investing in both Pilgrims Pride 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 Pilgrims Pride and JBS SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pilgrims Pride Corp and JBS SA, you can compare the effects of market volatilities on Pilgrims Pride 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 Pilgrims Pride with a short position of JBS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pilgrims Pride and JBS SA.
Diversification Opportunities for Pilgrims Pride and JBS SA
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pilgrims and JBS is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pilgrims Pride Corp and JBS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBS SA and Pilgrims Pride 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 Pilgrims Pride Corp 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 Pilgrims Pride i.e., Pilgrims Pride and JBS SA go up and down completely randomly.
Pair Corralation between Pilgrims Pride and JBS SA
Considering the 90-day investment horizon Pilgrims Pride Corp is expected to generate 0.72 times more return on investment than JBS SA. However, Pilgrims Pride Corp is 1.38 times less risky than JBS SA. It trades about 0.1 of its potential returns per unit of risk. JBS SA is currently generating about 0.06 per unit of risk. If you would invest 1,919 in Pilgrims Pride Corp on March 22, 2025 and sell it today you would earn a total of 2,671 from holding Pilgrims Pride Corp or generate 139.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pilgrims Pride Corp vs. JBS SA
Performance |
| Timeline |
| Pilgrims Pride Corp |
| JBS SA |
Pilgrims Pride and JBS SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pilgrims Pride and JBS SA
The main advantage of trading using opposite Pilgrims Pride and JBS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pilgrims Pride 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.| Pilgrims Pride vs. Bellring Brands LLC | Pilgrims Pride vs. Treehouse Foods | Pilgrims Pride vs. Ingredion Incorporated | Pilgrims Pride vs. JM Smucker |
| JBS SA vs. BRF SA ADR | JBS SA vs. Natures Sunshine Products | JBS SA vs. Marfrig Global Foods | JBS SA vs. Bridgford 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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