Correlation Between Catalent and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both Catalent 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 Catalent and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalent and Marfrig Global Foods, you can compare the effects of market volatilities on Catalent 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 Catalent with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalent and Marfrig Global.
Diversification Opportunities for Catalent and Marfrig Global
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catalent and Marfrig is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Catalent 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 Catalent 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 Catalent 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 Catalent i.e., Catalent and Marfrig Global go up and down completely randomly.
Pair Corralation between Catalent and Marfrig Global
Given the investment horizon of 90 days Catalent is expected to generate 3.5 times less return on investment than Marfrig Global. But when comparing it to its historical volatility, Catalent is 3.94 times less risky than Marfrig Global. It trades about 0.24 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 270.00 in Marfrig Global Foods on September 1, 2024 and sell it today you would earn a total of 40.00 from holding Marfrig Global Foods or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalent vs. Marfrig Global Foods
Performance |
| Timeline |
| Catalent |
| Marfrig Global Foods |
Catalent and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalent and Marfrig Global
The main advantage of trading using opposite Catalent and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalent 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.| Catalent vs. Crinetics Pharmaceuticals | Catalent vs. Enanta Pharmaceuticals | Catalent vs. Amicus Therapeutics | Catalent vs. Connect Biopharma Holdings |
| Marfrig Global vs. The A2 Milk | Marfrig Global vs. Altavoz Entertainment | Marfrig Global vs. Artisan Consumer Goods | Marfrig Global vs. General Mills |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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