Correlation Between Marfrig Global and Citizens
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Citizens 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 Citizens 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 Citizens, you can compare the effects of market volatilities on Marfrig Global and Citizens 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 Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Citizens.
Diversification Opportunities for Marfrig Global and Citizens
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Marfrig and Citizens is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens 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 Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens has no effect on the direction of Marfrig Global i.e., Marfrig Global and Citizens go up and down completely randomly.
Pair Corralation between Marfrig Global and Citizens
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 0.82 times more return on investment than Citizens. However, Marfrig Global Foods is 1.21 times less risky than Citizens. It trades about 0.07 of its potential returns per unit of risk. Citizens is currently generating about 0.05 per unit of risk. If you would invest 126.00 in Marfrig Global Foods on September 2, 2024 and sell it today you would earn a total of 179.00 from holding Marfrig Global Foods or generate 142.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. Citizens
Performance |
| Timeline |
| Marfrig Global Foods |
| Citizens |
Marfrig Global and Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Citizens
The main advantage of trading using opposite Marfrig Global and Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Citizens 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 Citizens will offset losses from the drop in Citizens' long position.| Marfrig Global vs. The A2 Milk | Marfrig Global vs. Artisan Consumer Goods | Marfrig Global vs. General Mills |
| Citizens vs. CNO Financial Group | Citizens vs. Brighthouse Financial | Citizens vs. FG Annuities Life | Citizens vs. Prudential Public Limited |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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