Correlation Between Marfrig Global and Take Two
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Take Two 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 Take Two 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 Take Two Interactive Software, you can compare the effects of market volatilities on Marfrig Global and Take Two 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 Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Take Two.
Diversification Opportunities for Marfrig Global and Take Two
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Marfrig and Take is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive 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 Take Two. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of Marfrig Global i.e., Marfrig Global and Take Two go up and down completely randomly.
Pair Corralation between Marfrig Global and Take Two
Assuming the 90 days trading horizon Marfrig Global Foods is expected to generate 1.57 times more return on investment than Take Two. However, Marfrig Global is 1.57 times more volatile than Take Two Interactive Software. It trades about 0.1 of its potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.08 per unit of risk. If you would invest 972.00 in Marfrig Global Foods on August 26, 2024 and sell it today you would earn a total of 848.00 from holding Marfrig Global Foods or generate 87.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. Take Two Interactive Software
Performance |
| Timeline |
| Marfrig Global Foods |
| Take Two Interactive |
Marfrig Global and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Take Two
The main advantage of trading using opposite Marfrig Global and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Take Two 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 Take Two will offset losses from the drop in Take Two's long position.| Marfrig Global vs. Minerva SA | Marfrig Global vs. BRF SA | Marfrig Global vs. Companhia Siderrgica Nacional | Marfrig Global vs. Cyrela Brazil Realty |
| Take Two vs. Technos SA | Take Two vs. Palantir Technologies | Take Two vs. Deutsche Bank Aktiengesellschaft | Take Two vs. Align Technology |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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