Correlation Between Marfrig Global and Lifevantage
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Lifevantage 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 Lifevantage 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 Lifevantage, you can compare the effects of market volatilities on Marfrig Global and Lifevantage 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 Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Lifevantage.
Diversification Opportunities for Marfrig Global and Lifevantage
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Marfrig and Lifevantage is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage 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 Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of Marfrig Global i.e., Marfrig Global and Lifevantage go up and down completely randomly.
Pair Corralation between Marfrig Global and Lifevantage
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 0.83 times more return on investment than Lifevantage. However, Marfrig Global Foods is 1.2 times less risky than Lifevantage. It trades about 0.24 of its potential returns per unit of risk. Lifevantage is currently generating about 0.07 per unit of risk. If you would invest 244.00 in Marfrig Global Foods on August 24, 2024 and sell it today you would earn a total of 41.00 from holding Marfrig Global Foods or generate 16.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Marfrig Global Foods vs. Lifevantage
Performance |
| Timeline |
| Marfrig Global Foods |
| Lifevantage |
Marfrig Global and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Lifevantage
The main advantage of trading using opposite Marfrig Global and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage's long position.| Marfrig Global vs. Artisan Consumer Goods | Marfrig Global vs. Avi Ltd ADR | Marfrig Global vs. Aryzta AG PK | Marfrig Global vs. The A2 Milk |
| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Associated British Foods |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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