Correlation Between Marfrig Global and Astral Foods
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Astral Foods 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 Astral Foods 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 Astral Foods Limited, you can compare the effects of market volatilities on Marfrig Global and Astral Foods 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 Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Astral Foods.
Diversification Opportunities for Marfrig Global and Astral Foods
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marfrig and Astral is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Astral Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods Limited 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 Astral Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Foods Limited has no effect on the direction of Marfrig Global i.e., Marfrig Global and Astral Foods go up and down completely randomly.
Pair Corralation between Marfrig Global and Astral Foods
Assuming the 90 days horizon Marfrig Global Foods is expected to under-perform the Astral Foods. In addition to that, Marfrig Global is 3.96 times more volatile than Astral Foods Limited. It trades about -0.04 of its total potential returns per unit of risk. Astral Foods Limited is currently generating about 0.23 per unit of volatility. If you would invest 710.00 in Astral Foods Limited on November 2, 2024 and sell it today you would earn a total of 29.00 from holding Astral Foods Limited or generate 4.08% 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. Astral Foods Limited
Performance |
| Timeline |
| Marfrig Global Foods |
| Astral Foods Limited |
Marfrig Global and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Astral Foods
The main advantage of trading using opposite Marfrig Global and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Astral Foods 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 Astral Foods will offset losses from the drop in Astral Foods' long position.| Marfrig Global vs. BRF SA ADR | Marfrig Global vs. Pilgrims Pride Corp | Marfrig Global vs. John B Sanfilippo | Marfrig Global vs. Seneca Foods Corp |
| Astral Foods vs. Austevoll Seafood ASA | Astral Foods vs. Golden Agri Resources | Astral Foods vs. SalMar ASA | Astral Foods vs. Wilmar International |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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