Correlation Between Cosan SA and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both Cosan SA 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 Cosan SA and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosan SA and Marfrig Global Foods, you can compare the effects of market volatilities on Cosan SA 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 Cosan SA with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosan SA and Marfrig Global.
Diversification Opportunities for Cosan SA and Marfrig Global
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cosan and Marfrig is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cosan SA 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 Cosan 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 Cosan SA 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 Cosan SA i.e., Cosan SA and Marfrig Global go up and down completely randomly.
Pair Corralation between Cosan SA and Marfrig Global
Assuming the 90 days trading horizon Cosan SA is expected to generate 1.35 times more return on investment than Marfrig Global. However, Cosan SA is 1.35 times more volatile than Marfrig Global Foods. It trades about 0.02 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about -0.14 per unit of risk. If you would invest 802.00 in Cosan SA on November 2, 2024 and sell it today you would earn a total of 1.00 from holding Cosan SA or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosan SA vs. Marfrig Global Foods
Performance |
| Timeline |
| Cosan SA |
| Marfrig Global Foods |
Cosan SA and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosan SA and Marfrig Global
The main advantage of trading using opposite Cosan SA and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosan SA 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.| Cosan SA vs. Braskem SA | Cosan SA vs. Cyrela Brazil Realty | Cosan SA vs. CCR SA | Cosan SA vs. Lojas Renner SA |
| Marfrig Global vs. JBS SA | Marfrig Global vs. Minerva SA | Marfrig Global vs. BRF SA | Marfrig Global vs. Companhia Siderrgica Nacional |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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