Correlation Between IOIBerhad and JBS SA

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

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

Diversification Opportunities for IOIBerhad and JBS SA

-0.66

Correlation Coefficient

IOIBerhad  JBS SA

Excellent diversification

The 3 months correlation between IOIBerhad and JBS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding IOI Berhad and JBS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBS SA and IOIBerhad 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 IOI Berhad 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 IOIBerhad i.e., IOIBerhad and JBS SA go up and down completely randomly.

Pair Corralation between IOIBerhad and JBS SA

Assuming the 90 days horizon IOIBerhad is expected to generate 34.67 times less return on investment than JBS SA. But when comparing it to its historical volatility, IOI Berhad is 11.23 times less risky than JBS SA. It trades about 0.12 of its potential returns per unit of risk. JBS SA is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  1,347  in JBS SA on July 28, 2025 and sell it today you would earn a total of  218.00  from holding JBS SA or generate 16.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	33.33%
Values	Daily Returns

IOI Berhad  vs.  JBS SA

IOI Berhad

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in IOI Berhad are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IOIBerhad is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 IOIBerhad and JBS SA

The main advantage of trading using opposite IOIBerhad and JBS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IOIBerhad 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 IOI Berhad 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.