Correlation Between Marfrig Global and Aryzta AG
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Aryzta AG 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 Aryzta AG 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 Aryzta AG PK, you can compare the effects of market volatilities on Marfrig Global and Aryzta AG 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 Aryzta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Aryzta AG.
Diversification Opportunities for Marfrig Global and Aryzta AG
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marfrig and Aryzta is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Aryzta AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aryzta AG PK 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 Aryzta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aryzta AG PK has no effect on the direction of Marfrig Global i.e., Marfrig Global and Aryzta AG go up and down completely randomly.
Pair Corralation between Marfrig Global and Aryzta AG
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 1.01 times more return on investment than Aryzta AG. However, Marfrig Global is 1.01 times more volatile than Aryzta AG PK. It trades about 0.37 of its potential returns per unit of risk. Aryzta AG PK is currently generating about 0.12 per unit of risk. If you would invest 274.00 in Marfrig Global Foods on September 13, 2024 and sell it today you would earn a total of 74.00 from holding Marfrig Global Foods or generate 27.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Marfrig Global Foods vs. Aryzta AG PK
Performance |
| Timeline |
| Marfrig Global Foods |
| Aryzta AG PK |
Marfrig Global and Aryzta AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Aryzta AG
The main advantage of trading using opposite Marfrig Global and Aryzta AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Aryzta AG 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 Aryzta AG will offset losses from the drop in Aryzta AG's 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 |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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