Correlation Between Marfrig Global and Iris Energy
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Iris Energy 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 Iris Energy 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 Iris Energy, you can compare the effects of market volatilities on Marfrig Global and Iris Energy 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 Iris Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Iris Energy.
Diversification Opportunities for Marfrig Global and Iris Energy
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marfrig and Iris is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Iris Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris Energy 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 Iris Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iris Energy has no effect on the direction of Marfrig Global i.e., Marfrig Global and Iris Energy go up and down completely randomly.
Pair Corralation between Marfrig Global and Iris Energy
Assuming the 90 days horizon Marfrig Global is expected to generate 2.46 times less return on investment than Iris Energy. But when comparing it to its historical volatility, Marfrig Global Foods is 2.45 times less risky than Iris Energy. It trades about 0.08 of its potential returns per unit of risk. Iris Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 357.00 in Iris Energy on August 31, 2024 and sell it today you would earn a total of 994.00 from holding Iris Energy or generate 278.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Marfrig Global Foods vs. Iris Energy
Performance |
| Timeline |
| Marfrig Global Foods |
| Iris Energy |
Marfrig Global and Iris Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Iris Energy
The main advantage of trading using opposite Marfrig Global and Iris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Iris Energy 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 Iris Energy will offset losses from the drop in Iris Energy's long position.| Marfrig Global vs. The A2 Milk | Marfrig Global vs. Altavoz Entertainment | Marfrig Global vs. Artisan Consumer Goods | Marfrig Global vs. General Mills |
| Iris Energy vs. SEI Investments | Iris Energy vs. Citizens Bancorp Investment | Iris Energy vs. Valneva SE ADR | Iris Energy vs. Lipocine |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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