Correlation Between Marfrig Global and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Uber Technologies 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 Uber Technologies 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 Uber Technologies, you can compare the effects of market volatilities on Marfrig Global and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Uber Technologies.
Diversification Opportunities for Marfrig Global and Uber Technologies
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marfrig and Uber is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Marfrig Global i.e., Marfrig Global and Uber Technologies go up and down completely randomly.
Pair Corralation between Marfrig Global and Uber Technologies
Assuming the 90 days trading horizon Marfrig Global Foods is expected to generate 0.91 times more return on investment than Uber Technologies. However, Marfrig Global Foods is 1.1 times less risky than Uber Technologies. It trades about 0.46 of its potential returns per unit of risk. Uber Technologies is currently generating about -0.1 per unit of risk. If you would invest 1,445 in Marfrig Global Foods on August 26, 2024 and sell it today you would earn a total of 375.00 from holding Marfrig Global Foods or generate 25.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. Uber Technologies
Performance |
| Timeline |
| Marfrig Global Foods |
| Uber Technologies |
Marfrig Global and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Uber Technologies
The main advantage of trading using opposite Marfrig Global and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.The idea behind Marfrig Global Foods and Uber Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Uber Technologies vs. Take Two Interactive Software | Uber Technologies vs. Dell Technologies | Uber Technologies vs. Cognizant Technology Solutions | Uber Technologies vs. Bio Techne |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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