Correlation Between Marfrig Global and Collective Mining
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Collective Mining 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 Collective Mining 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 Collective Mining, you can compare the effects of market volatilities on Marfrig Global and Collective Mining 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 Collective Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Collective Mining.
Diversification Opportunities for Marfrig Global and Collective Mining
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Marfrig and Collective is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Collective Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collective Mining 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 Collective Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collective Mining has no effect on the direction of Marfrig Global i.e., Marfrig Global and Collective Mining go up and down completely randomly.
Pair Corralation between Marfrig Global and Collective Mining
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 0.91 times more return on investment than Collective Mining. However, Marfrig Global Foods is 1.09 times less risky than Collective Mining. It trades about 0.18 of its potential returns per unit of risk. Collective Mining is currently generating about 0.08 per unit of risk. If you would invest 243.00 in Marfrig Global Foods on September 12, 2024 and sell it today you would earn a total of 84.00 from holding Marfrig Global Foods or generate 34.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Marfrig Global Foods vs. Collective Mining
Performance |
| Timeline |
| Marfrig Global Foods |
| Collective Mining |
Marfrig Global and Collective Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Collective Mining
The main advantage of trading using opposite Marfrig Global and Collective Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Collective Mining 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 Collective Mining will offset losses from the drop in Collective Mining'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 |
| Collective Mining vs. Hurco Companies | Collective Mining vs. Evolution Mining | Collective Mining vs. Supercom | Collective Mining vs. Harmony Gold Mining |
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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