Correlation Between BRF SA and Glucose Health
Can any of the company-specific risk be diversified away by investing in both BRF SA and Glucose Health 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 BRF SA and Glucose Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRF SA ADR and Glucose Health, you can compare the effects of market volatilities on BRF SA and Glucose Health 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 BRF SA with a short position of Glucose Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRF SA and Glucose Health.
Diversification Opportunities for BRF SA and Glucose Health
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BRF and Glucose is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding BRF SA ADR and Glucose Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glucose Health and BRF 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 BRF SA ADR are associated (or correlated) with Glucose Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glucose Health has no effect on the direction of BRF SA i.e., BRF SA and Glucose Health go up and down completely randomly.
Pair Corralation between BRF SA and Glucose Health
Given the investment horizon of 90 days BRF SA ADR is expected to generate 0.15 times more return on investment than Glucose Health. However, BRF SA ADR is 6.53 times less risky than Glucose Health. It trades about 0.29 of its potential returns per unit of risk. Glucose Health is currently generating about -0.08 per unit of risk. If you would invest 409.00 in BRF SA ADR on September 20, 2024 and sell it today you would earn a total of 58.00 from holding BRF SA ADR or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRF SA ADR vs. Glucose Health
Performance |
| Timeline |
| BRF SA ADR |
| Glucose Health |
BRF SA and Glucose Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRF SA and Glucose Health
The main advantage of trading using opposite BRF SA and Glucose Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRF SA position performs unexpectedly, Glucose Health 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 Glucose Health will offset losses from the drop in Glucose Health's long position.| BRF SA vs. Marfrig Global Foods | BRF SA vs. Pilgrims Pride Corp | BRF SA vs. John B Sanfilippo | BRF SA vs. Seneca Foods Corp |
| Glucose Health vs. BRF SA ADR | Glucose Health vs. Pilgrims Pride Corp | Glucose Health vs. John B Sanfilippo | Glucose Health vs. Seneca Foods Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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