Correlation Between JSL SA and Plascar Participaes

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

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

Diversification Opportunities for JSL SA and Plascar Participaes

0.78

Correlation Coefficient

JSL SA  Plascar Participaes

Poor diversification

The 3 months correlation between JSL and Plascar is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding JSL SA and Plascar Participaes Industriai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plascar Participaes and JSL 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 JSL SA are associated (or correlated) with Plascar Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plascar Participaes has no effect on the direction of JSL SA i.e., JSL SA and Plascar Participaes go up and down completely randomly.

Pair Corralation between JSL SA and Plascar Participaes

Assuming the 90 days trading horizon JSL SA is expected to generate 1.17 times more return on investment than Plascar Participaes. However, JSL SA is 1.17 times more volatile than Plascar Participaes Industriais. It trades about -0.1 of its potential returns per unit of risk. Plascar Participaes Industriais is currently generating about -0.14 per unit of risk. If you would invest  643.00  in JSL SA on April 23, 2025 and sell it today you would lose (118.00) from holding JSL SA or give up 18.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

JSL SA  vs.  Plascar Participaes Industriai

JSL SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days JSL SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Plascar Participaes

Risk-Adjusted Performance

Very Weak

Over the last 90 days Plascar Participaes Industriais has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with JSL SA and Plascar Participaes

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

The idea behind JSL SA and Plascar Participaes Industriais 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.