Correlation Between Marfrig Global and Lamb Weston
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Lamb Weston 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 Lamb Weston 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 Lamb Weston Holdings, you can compare the effects of market volatilities on Marfrig Global and Lamb Weston 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 Lamb Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Lamb Weston.
Diversification Opportunities for Marfrig Global and Lamb Weston
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marfrig and Lamb is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Lamb Weston Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamb Weston Holdings 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 Lamb Weston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamb Weston Holdings has no effect on the direction of Marfrig Global i.e., Marfrig Global and Lamb Weston go up and down completely randomly.
Pair Corralation between Marfrig Global and Lamb Weston
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 1.04 times more return on investment than Lamb Weston. However, Marfrig Global is 1.04 times more volatile than Lamb Weston Holdings. It trades about 0.1 of its potential returns per unit of risk. Lamb Weston Holdings is currently generating about -0.01 per unit of risk. If you would invest 220.00 in Marfrig Global Foods on August 30, 2024 and sell it today you would earn a total of 92.00 from holding Marfrig Global Foods or generate 41.82% 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. Lamb Weston Holdings
Performance |
| Timeline |
| Marfrig Global Foods |
| Lamb Weston Holdings |
Marfrig Global and Lamb Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Lamb Weston
The main advantage of trading using opposite Marfrig Global and Lamb Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Lamb Weston 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 Lamb Weston will offset losses from the drop in Lamb Weston's long position.| Marfrig Global vs. Darling Ingredients | Marfrig Global vs. Paranovus Entertainment Technology | Marfrig Global vs. ABIVAX Socit Anonyme | Marfrig Global vs. Pinnacle Sherman Multi Strategy |
| Lamb Weston vs. Allegion PLC | Lamb Weston vs. Evergy, | Lamb Weston vs. Fortive Corp | Lamb Weston vs. IQVIA Holdings |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |