Correlation Between JS Real and HEDGE Brasil

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

By analyzing existing cross correlation between JS Real Estate and HEDGE Brasil Shopping, you can compare the effects of market volatilities on JS Real and HEDGE Brasil 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 JS Real with a short position of HEDGE Brasil. Check out your portfolio center. Please also check ongoing floating volatility patterns of JS Real and HEDGE Brasil.

Diversification Opportunities for JS Real and HEDGE Brasil

0.58

Correlation Coefficient

JS Real  HEDGE Brasil

Very weak diversification

The 3 months correlation between JSRE11 and HEDGE is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding JS Real Estate and HEDGE Brasil Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEDGE Brasil Shopping and JS Real 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 JS Real Estate are associated (or correlated) with HEDGE Brasil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEDGE Brasil Shopping has no effect on the direction of JS Real i.e., JS Real and HEDGE Brasil go up and down completely randomly.

Pair Corralation between JS Real and HEDGE Brasil

Assuming the 90 days trading horizon JS Real Estate is expected to generate 1.41 times more return on investment than HEDGE Brasil. However, JS Real is 1.41 times more volatile than HEDGE Brasil Shopping. It trades about 0.09 of its potential returns per unit of risk. HEDGE Brasil Shopping is currently generating about 0.03 per unit of risk. If you would invest  6,135  in JS Real Estate on April 22, 2025 and sell it today you would earn a total of  426.00  from holding JS Real Estate or generate 6.94% return on investment over 90 days.

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

JS Real Estate  vs.  HEDGE Brasil Shopping

JS Real Estate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JS Real Estate are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, JS Real may actually be approaching a critical reversion point that can send shares even higher in August 2025.

HEDGE Brasil Shopping

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HEDGE Brasil Shopping are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental drivers, HEDGE Brasil is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JS Real and HEDGE Brasil

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

The idea behind JS Real Estate and HEDGE Brasil Shopping 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.

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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.