Correlation Between Fras Le and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both Fras Le 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 Fras Le and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fras le SA and Marfrig Global Foods, you can compare the effects of market volatilities on Fras Le 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 Fras Le with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fras Le and Marfrig Global.
Diversification Opportunities for Fras Le and Marfrig Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fras and Marfrig is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fras le 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 Fras Le 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 Fras le 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 Fras Le i.e., Fras Le and Marfrig Global go up and down completely randomly.
Pair Corralation between Fras Le and Marfrig Global
Assuming the 90 days trading horizon Fras le SA is expected to under-perform the Marfrig Global. But the stock apears to be less risky and, when comparing its historical volatility, Fras le SA is 1.48 times less risky than Marfrig Global. The stock trades about -0.09 of its potential returns per unit of risk. The Marfrig Global Foods is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 1,537 in Marfrig Global Foods on September 2, 2024 and sell it today you would earn a total of 340.00 from holding Marfrig Global Foods or generate 22.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fras le SA vs. Marfrig Global Foods
Performance |
| Timeline |
| Fras le SA |
| Marfrig Global Foods |
Fras Le and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fras Le and Marfrig Global
The main advantage of trading using opposite Fras Le and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fras Le 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.| Fras Le vs. Engie Brasil Energia | Fras Le vs. Energisa SA | Fras Le vs. Clave Indices De | Fras Le vs. BTG Pactual Logstica |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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