Correlation Between Booking Holdings and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both Booking Holdings and Marfrig Global 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 Booking Holdings and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Booking Holdings and Marfrig Global Foods, you can compare the effects of market volatilities on Booking Holdings and Marfrig Global 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 Booking Holdings with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Booking Holdings and Marfrig Global.
Diversification Opportunities for Booking Holdings and Marfrig Global
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Booking and Marfrig is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Booking Holdings and Marfrig Global Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfrig Global Foods and Booking Holdings 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 Booking Holdings are associated (or correlated) with Marfrig Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfrig Global Foods has no effect on the direction of Booking Holdings i.e., Booking Holdings and Marfrig Global go up and down completely randomly.
Pair Corralation between Booking Holdings and Marfrig Global
Assuming the 90 days trading horizon Booking Holdings is expected to generate 0.72 times more return on investment than Marfrig Global. However, Booking Holdings is 1.39 times less risky than Marfrig Global. It trades about 0.11 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.07 per unit of risk. If you would invest 6,579 in Booking Holdings on August 31, 2024 and sell it today you would earn a total of 10,712 from holding Booking Holdings or generate 162.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Booking Holdings vs. Marfrig Global Foods
Performance |
| Timeline |
| Booking Holdings |
| Marfrig Global Foods |
Booking Holdings and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Booking Holdings and Marfrig Global
The main advantage of trading using opposite Booking Holdings and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Booking Holdings position performs unexpectedly, Marfrig Global 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 Marfrig Global will offset losses from the drop in Marfrig Global's long position.| Booking Holdings vs. Marfrig Global Foods | Booking Holdings vs. METISA Metalrgica Timboense | Booking Holdings vs. Monster Beverage | Booking Holdings vs. Tyson Foods |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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