Correlation Between Marfrig Global and Global E
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Global E 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 Global E 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 Global E Online, you can compare the effects of market volatilities on Marfrig Global and Global E 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 Global E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Global E.
Diversification Opportunities for Marfrig Global and Global E
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Marfrig and Global is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Global E Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Online 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 Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Online has no effect on the direction of Marfrig Global i.e., Marfrig Global and Global E go up and down completely randomly.
Pair Corralation between Marfrig Global and Global E
Assuming the 90 days horizon Marfrig Global is expected to generate 1.25 times less return on investment than Global E. But when comparing it to its historical volatility, Marfrig Global Foods is 1.11 times less risky than Global E. It trades about 0.37 of its potential returns per unit of risk. Global E Online is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 4,020 in Global E Online on September 12, 2024 and sell it today you would earn a total of 1,332 from holding Global E Online or generate 33.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Marfrig Global Foods vs. Global E Online
Performance |
| Timeline |
| Marfrig Global Foods |
| Global E Online |
Marfrig Global and Global E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Global E
The main advantage of trading using opposite Marfrig Global and Global E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Global E 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 Global E will offset losses from the drop in Global E'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 |
| Global E vs. MercadoLibre | Global E vs. PDD Holdings | Global E vs. JD Inc Adr | Global E vs. Alibaba Group Holding |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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