Correlation Between Marfrig Global and Mangels Industrial
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Mangels Industrial 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 Mangels Industrial 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 Mangels Industrial SA, you can compare the effects of market volatilities on Marfrig Global and Mangels Industrial 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 Mangels Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Mangels Industrial.
Diversification Opportunities for Marfrig Global and Mangels Industrial
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marfrig and Mangels is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Mangels Industrial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mangels Industrial 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 Mangels Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mangels Industrial has no effect on the direction of Marfrig Global i.e., Marfrig Global and Mangels Industrial go up and down completely randomly.
Pair Corralation between Marfrig Global and Mangels Industrial
Assuming the 90 days trading horizon Marfrig Global Foods is expected to generate 0.82 times more return on investment than Mangels Industrial. However, Marfrig Global Foods is 1.22 times less risky than Mangels Industrial. It trades about 0.08 of its potential returns per unit of risk. Mangels Industrial SA is currently generating about -0.02 per unit of risk. If you would invest 712.00 in Marfrig Global Foods on August 28, 2024 and sell it today you would earn a total of 1,124 from holding Marfrig Global Foods or generate 157.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. Mangels Industrial SA
Performance |
| Timeline |
| Marfrig Global Foods |
| Mangels Industrial |
Marfrig Global and Mangels Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Mangels Industrial
The main advantage of trading using opposite Marfrig Global and Mangels Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Mangels Industrial 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 Mangels Industrial will offset losses from the drop in Mangels Industrial's long position.| Marfrig Global vs. Minerva SA | Marfrig Global vs. Companhia Siderrgica Nacional | Marfrig Global vs. Cyrela Brazil Realty |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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