Correlation Between Marfrig Global and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and NETGEAR 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 NETGEAR 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 NETGEAR, you can compare the effects of market volatilities on Marfrig Global and NETGEAR 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 NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and NETGEAR.
Diversification Opportunities for Marfrig Global and NETGEAR
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marfrig and NETGEAR is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR 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 NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Marfrig Global i.e., Marfrig Global and NETGEAR go up and down completely randomly.
Pair Corralation between Marfrig Global and NETGEAR
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 1.11 times more return on investment than NETGEAR. However, Marfrig Global is 1.11 times more volatile than NETGEAR. It trades about 0.07 of its potential returns per unit of risk. NETGEAR is currently generating about 0.03 per unit of risk. If you would invest 125.00 in Marfrig Global Foods on September 5, 2024 and sell it today you would earn a total of 183.00 from holding Marfrig Global Foods or generate 146.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Marfrig Global Foods vs. NETGEAR
Performance |
| Timeline |
| Marfrig Global Foods |
| NETGEAR |
Marfrig Global and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and NETGEAR
The main advantage of trading using opposite Marfrig Global and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR's 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 |
| NETGEAR vs. Cambium Networks Corp | NETGEAR vs. Knowles Cor | NETGEAR vs. Ituran Location and | NETGEAR vs. ADTRAN Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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