Correlation Between JBS SA and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both JBS 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 JBS 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 JBS SA and Marfrig Global Foods, you can compare the effects of market volatilities on JBS 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 JBS SA with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBS SA and Marfrig Global.
Diversification Opportunities for JBS SA and Marfrig Global
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JBS and Marfrig is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding JBS 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 JBS 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 JBS 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 JBS SA i.e., JBS SA and Marfrig Global go up and down completely randomly.
Pair Corralation between JBS SA and Marfrig Global
Assuming the 90 days horizon JBS SA is expected to generate 1.33 times less return on investment than Marfrig Global. But when comparing it to its historical volatility, JBS SA is 1.31 times less risky than Marfrig Global. It trades about 0.06 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 129.00 in Marfrig Global Foods on November 2, 2024 and sell it today you would earn a total of 134.00 from holding Marfrig Global Foods or generate 103.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBS SA vs. Marfrig Global Foods
Performance |
| Timeline |
| JBS SA |
| Marfrig Global Foods |
JBS SA and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBS SA and Marfrig Global
The main advantage of trading using opposite JBS SA and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBS 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.| JBS SA vs. BRF SA ADR | JBS SA vs. Natures Sunshine Products | JBS SA vs. Marfrig Global Foods | JBS SA vs. Bridgford Foods |
| Marfrig Global vs. BRF SA ADR | Marfrig Global vs. Pilgrims Pride Corp | Marfrig Global vs. John B Sanfilippo | Marfrig Global 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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