Correlation Between Energisa and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both Energisa 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 Energisa and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Marfrig Global Foods, you can compare the effects of market volatilities on Energisa 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 Energisa with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Marfrig Global.
Diversification Opportunities for Energisa and Marfrig Global
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Energisa and Marfrig is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Energisa 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 Energisa 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 Energisa 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 Energisa i.e., Energisa and Marfrig Global go up and down completely randomly.
Pair Corralation between Energisa and Marfrig Global
Assuming the 90 days trading horizon Energisa SA is expected to under-perform the Marfrig Global. But the stock apears to be less risky and, when comparing its historical volatility, Energisa SA is 1.36 times less risky than Marfrig Global. The stock trades about -0.14 of its potential returns per unit of risk. The Marfrig Global Foods is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,541 in Marfrig Global Foods on August 31, 2024 and sell it today you would earn a total of 296.00 from holding Marfrig Global Foods or generate 19.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energisa SA vs. Marfrig Global Foods
Performance |
| Timeline |
| Energisa SA |
| Marfrig Global Foods |
Energisa and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Marfrig Global
The main advantage of trading using opposite Energisa and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa 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.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| Marfrig Global vs. Companhia Siderrgica Nacional | Marfrig Global vs. Cyrela Brazil Realty | Marfrig Global vs. Fras le SA | Marfrig Global vs. Energisa SA |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |