Correlation Between Marfrig Global and Expedia
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Expedia 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 Expedia 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 Expedia Group, you can compare the effects of market volatilities on Marfrig Global and Expedia 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 Expedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Expedia.
Diversification Opportunities for Marfrig Global and Expedia
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marfrig and Expedia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia Group 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 Expedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expedia Group has no effect on the direction of Marfrig Global i.e., Marfrig Global and Expedia go up and down completely randomly.
Pair Corralation between Marfrig Global and Expedia
Assuming the 90 days trading horizon Marfrig Global is expected to generate 1.18 times less return on investment than Expedia. In addition to that, Marfrig Global is 1.36 times more volatile than Expedia Group. It trades about 0.35 of its total potential returns per unit of risk. Expedia Group is currently generating about 0.56 per unit of volatility. If you would invest 46,485 in Expedia Group on September 3, 2024 and sell it today you would earn a total of 10,299 from holding Expedia Group or generate 22.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. Expedia Group
Performance |
| Timeline |
| Marfrig Global Foods |
| Expedia Group |
Marfrig Global and Expedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Expedia
The main advantage of trading using opposite Marfrig Global and Expedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Expedia 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 Expedia will offset losses from the drop in Expedia's long position.| Marfrig Global vs. JBS SA | Marfrig Global vs. Minerva SA | Marfrig Global vs. BRF SA | Marfrig Global vs. Companhia Siderrgica Nacional |
| Expedia vs. BIONTECH SE DRN | Expedia vs. Raytheon Technologies | Expedia vs. Southwest Airlines Co | Expedia vs. Beyond Meat |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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