Correlation Between Marfrig Global and Chevron
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Chevron 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 Chevron 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 Chevron, you can compare the effects of market volatilities on Marfrig Global and Chevron 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 Chevron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Chevron.
Diversification Opportunities for Marfrig Global and Chevron
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marfrig and Chevron is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Chevron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron 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 Chevron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron has no effect on the direction of Marfrig Global i.e., Marfrig Global and Chevron go up and down completely randomly.
Pair Corralation between Marfrig Global and Chevron
Assuming the 90 days trading horizon Marfrig Global Foods is expected to generate 2.55 times more return on investment than Chevron. However, Marfrig Global is 2.55 times more volatile than Chevron. It trades about 0.07 of its potential returns per unit of risk. Chevron is currently generating about 0.02 per unit of risk. If you would invest 567.00 in Marfrig Global Foods on November 1, 2024 and sell it today you would earn a total of 1,007 from holding Marfrig Global Foods or generate 177.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. Chevron
Performance |
| Timeline |
| Marfrig Global Foods |
| Chevron |
Marfrig Global and Chevron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Chevron
The main advantage of trading using opposite Marfrig Global and Chevron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Chevron 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 Chevron will offset losses from the drop in Chevron's long position.| Marfrig Global vs. JBS SA | Marfrig Global vs. Minerva SA | Marfrig Global vs. BRF SA | Marfrig Global vs. Companhia Siderrgica Nacional |
| Chevron vs. Exxon Mobil | Chevron vs. BP plc | Chevron vs. EQUINOR ASA DRN | Chevron vs. Petrleo Brasileiro 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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