Correlation Between Marfrig Global and EcoGraf
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and EcoGraf 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 EcoGraf 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 EcoGraf Limited, you can compare the effects of market volatilities on Marfrig Global and EcoGraf 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 EcoGraf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and EcoGraf.
Diversification Opportunities for Marfrig Global and EcoGraf
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Marfrig and EcoGraf is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and EcoGraf Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EcoGraf 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 EcoGraf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EcoGraf Limited has no effect on the direction of Marfrig Global i.e., Marfrig Global and EcoGraf go up and down completely randomly.
Pair Corralation between Marfrig Global and EcoGraf
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 0.68 times more return on investment than EcoGraf. However, Marfrig Global Foods is 1.47 times less risky than EcoGraf. It trades about 0.07 of its potential returns per unit of risk. EcoGraf Limited is currently generating about -0.06 per unit of risk. If you would invest 118.00 in Marfrig Global Foods on September 4, 2024 and sell it today you would earn a total of 187.00 from holding Marfrig Global Foods or generate 158.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Marfrig Global Foods vs. EcoGraf Limited
Performance |
| Timeline |
| Marfrig Global Foods |
| EcoGraf Limited |
Marfrig Global and EcoGraf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and EcoGraf
The main advantage of trading using opposite Marfrig Global and EcoGraf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, EcoGraf 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 EcoGraf will offset losses from the drop in EcoGraf'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 |
| EcoGraf vs. National Beverage Corp | EcoGraf vs. Compania Cervecerias Unidas | EcoGraf vs. The Coca Cola | EcoGraf vs. Diageo PLC ADR |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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