Correlation Between Marfrig Global and Booking Holdings
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Booking Holdings 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 Marfrig Global and Booking Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marfrig Global Foods and Booking Holdings, you can compare the effects of market volatilities on Marfrig Global and Booking Holdings 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 Marfrig Global with a short position of Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Booking Holdings.
Diversification Opportunities for Marfrig Global and Booking Holdings
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marfrig and Booking is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking Holdings and Marfrig Global 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 Marfrig Global Foods are associated (or correlated) with Booking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booking Holdings has no effect on the direction of Marfrig Global i.e., Marfrig Global and Booking Holdings go up and down completely randomly.
Pair Corralation between Marfrig Global and Booking Holdings
Assuming the 90 days trading horizon Marfrig Global Foods is expected to generate 1.18 times more return on investment than Booking Holdings. However, Marfrig Global is 1.18 times more volatile than Booking Holdings. It trades about 0.34 of its potential returns per unit of risk. Booking Holdings is currently generating about 0.35 per unit of risk. 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 Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Marfrig Global Foods vs. Booking Holdings
Performance |
| Timeline |
| Marfrig Global Foods |
| Booking Holdings |
Marfrig Global and Booking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Booking Holdings
The main advantage of trading using opposite Marfrig Global and Booking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Booking Holdings 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 Booking Holdings will offset losses from the drop in Booking Holdings' long position.| Marfrig Global vs. Companhia Siderrgica Nacional | Marfrig Global vs. Cyrela Brazil Realty | Marfrig Global vs. Fras le SA | Marfrig Global vs. Energisa SA |
| Booking Holdings vs. Marfrig Global Foods | Booking Holdings vs. METISA Metalrgica Timboense | Booking Holdings vs. Monster Beverage | Booking Holdings vs. Tyson Foods |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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