Correlation Between Marfrig Global and Israel Acquisitions
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Israel Acquisitions 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 Israel Acquisitions 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 Israel Acquisitions Corp, you can compare the effects of market volatilities on Marfrig Global and Israel Acquisitions 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 Israel Acquisitions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Israel Acquisitions.
Diversification Opportunities for Marfrig Global and Israel Acquisitions
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marfrig and Israel is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Israel Acquisitions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Acquisitions Corp 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 Israel Acquisitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Acquisitions Corp has no effect on the direction of Marfrig Global i.e., Marfrig Global and Israel Acquisitions go up and down completely randomly.
Pair Corralation between Marfrig Global and Israel Acquisitions
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 2.35 times more return on investment than Israel Acquisitions. However, Marfrig Global is 2.35 times more volatile than Israel Acquisitions Corp. It trades about 0.09 of its potential returns per unit of risk. Israel Acquisitions Corp is currently generating about 0.02 per unit of risk. If you would invest 191.00 in Marfrig Global Foods on September 14, 2024 and sell it today you would earn a total of 157.00 from holding Marfrig Global Foods or generate 82.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. Israel Acquisitions Corp
Performance |
| Timeline |
| Marfrig Global Foods |
| Israel Acquisitions Corp |
Marfrig Global and Israel Acquisitions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Israel Acquisitions
The main advantage of trading using opposite Marfrig Global and Israel Acquisitions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Israel Acquisitions 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 Israel Acquisitions will offset losses from the drop in Israel Acquisitions' 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 |
| Israel Acquisitions vs. Visa Class A | Israel Acquisitions vs. Diamond Hill Investment | Israel Acquisitions vs. Distoken Acquisition | Israel Acquisitions vs. AllianceBernstein Holding LP |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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