Correlation Between Marfrig Global and Playstudios
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Playstudios 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 Playstudios 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 Playstudios, you can compare the effects of market volatilities on Marfrig Global and Playstudios 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 Playstudios. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Playstudios.
Diversification Opportunities for Marfrig Global and Playstudios
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marfrig and Playstudios is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Playstudios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playstudios 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 Playstudios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playstudios has no effect on the direction of Marfrig Global i.e., Marfrig Global and Playstudios go up and down completely randomly.
Pair Corralation between Marfrig Global and Playstudios
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 1.0 times more return on investment than Playstudios. However, Marfrig Global is 1.0 times more volatile than Playstudios. It trades about 0.07 of its potential returns per unit of risk. Playstudios is currently generating about -0.03 per unit of risk. If you would invest 122.00 in Marfrig Global Foods on September 3, 2024 and sell it today you would earn a total of 183.00 from holding Marfrig Global Foods or generate 150.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. Playstudios
Performance |
| Timeline |
| Marfrig Global Foods |
| Playstudios |
Marfrig Global and Playstudios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Playstudios
The main advantage of trading using opposite Marfrig Global and Playstudios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Playstudios 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 Playstudios will offset losses from the drop in Playstudios' 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 |
| Playstudios vs. SohuCom | Playstudios vs. Snail, Class A | Playstudios vs. Playtika Holding Corp | Playstudios vs. Golden Matrix Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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