Correlation Between Marfrig Global and SLC Agrcola
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and SLC Agrcola 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 SLC Agrcola 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 SLC Agrcola SA, you can compare the effects of market volatilities on Marfrig Global and SLC Agrcola 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 SLC Agrcola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and SLC Agrcola.
Diversification Opportunities for Marfrig Global and SLC Agrcola
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marfrig and SLC is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and SLC Agrcola SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLC Agrcola SA 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 SLC Agrcola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLC Agrcola SA has no effect on the direction of Marfrig Global i.e., Marfrig Global and SLC Agrcola go up and down completely randomly.
Pair Corralation between Marfrig Global and SLC Agrcola
Assuming the 90 days trading horizon Marfrig Global Foods is expected to generate 1.79 times more return on investment than SLC Agrcola. However, Marfrig Global is 1.79 times more volatile than SLC Agrcola SA. It trades about 0.09 of its potential returns per unit of risk. SLC Agrcola SA is currently generating about -0.02 per unit of risk. If you would invest 718.00 in Marfrig Global Foods on August 27, 2024 and sell it today you would earn a total of 1,102 from holding Marfrig Global Foods or generate 153.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.69% |
| Values | Daily Returns |
Marfrig Global Foods vs. SLC Agrcola SA
Performance |
| Timeline |
| Marfrig Global Foods |
| SLC Agrcola SA |
Marfrig Global and SLC Agrcola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and SLC Agrcola
The main advantage of trading using opposite Marfrig Global and SLC Agrcola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, SLC Agrcola 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 SLC Agrcola will offset losses from the drop in SLC Agrcola's long position.| Marfrig Global vs. Minerva SA | Marfrig Global vs. Companhia Siderrgica Nacional | Marfrig Global vs. Cyrela Brazil Realty |
| SLC Agrcola vs. BrasilAgro Companhia | SLC Agrcola vs. So Martinho SA | SLC Agrcola vs. Marfrig Global Foods | SLC Agrcola vs. Minerva 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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