Correlation Between Marfrig Global and Acumen Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Acumen Pharmaceuticals 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 Acumen Pharmaceuticals 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 Acumen Pharmaceuticals, you can compare the effects of market volatilities on Marfrig Global and Acumen Pharmaceuticals 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 Acumen Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Acumen Pharmaceuticals.
Diversification Opportunities for Marfrig Global and Acumen Pharmaceuticals
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Marfrig and Acumen is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Acumen Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acumen Pharmaceuticals 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 Acumen Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acumen Pharmaceuticals has no effect on the direction of Marfrig Global i.e., Marfrig Global and Acumen Pharmaceuticals go up and down completely randomly.
Pair Corralation between Marfrig Global and Acumen Pharmaceuticals
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 0.6 times more return on investment than Acumen Pharmaceuticals. However, Marfrig Global Foods is 1.67 times less risky than Acumen Pharmaceuticals. It trades about 0.28 of its potential returns per unit of risk. Acumen Pharmaceuticals is currently generating about -0.19 per unit of risk. If you would invest 255.00 in Marfrig Global Foods on August 28, 2024 and sell it today you would earn a total of 53.00 from holding Marfrig Global Foods or generate 20.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. Acumen Pharmaceuticals
Performance |
| Timeline |
| Marfrig Global Foods |
| Acumen Pharmaceuticals |
Marfrig Global and Acumen Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Acumen Pharmaceuticals
The main advantage of trading using opposite Marfrig Global and Acumen Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Acumen Pharmaceuticals 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 Acumen Pharmaceuticals will offset losses from the drop in Acumen Pharmaceuticals' long position.| Marfrig Global vs. Artisan Consumer Goods | Marfrig Global vs. The A2 Milk | Marfrig Global vs. General Mills |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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