Correlation Between Marfrig Global and NetSol Technologies
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and NetSol Technologies 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 NetSol Technologies 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 NetSol Technologies, you can compare the effects of market volatilities on Marfrig Global and NetSol Technologies 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 NetSol Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and NetSol Technologies.
Diversification Opportunities for Marfrig Global and NetSol Technologies
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marfrig and NetSol is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and NetSol Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetSol Technologies 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 NetSol Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetSol Technologies has no effect on the direction of Marfrig Global i.e., Marfrig Global and NetSol Technologies go up and down completely randomly.
Pair Corralation between Marfrig Global and NetSol Technologies
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 0.93 times more return on investment than NetSol Technologies. However, Marfrig Global Foods is 1.07 times less risky than NetSol Technologies. It trades about 0.08 of its potential returns per unit of risk. NetSol Technologies is currently generating about 0.03 per unit of risk. If you would invest 155.00 in Marfrig Global Foods on August 26, 2024 and sell it today you would earn a total of 138.00 from holding Marfrig Global Foods or generate 89.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. NetSol Technologies
Performance |
| Timeline |
| Marfrig Global Foods |
| NetSol Technologies |
Marfrig Global and NetSol Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and NetSol Technologies
The main advantage of trading using opposite Marfrig Global and NetSol Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, NetSol Technologies 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 NetSol Technologies will offset losses from the drop in NetSol Technologies' long position.| Marfrig Global vs. Artisan Consumer Goods | Marfrig Global vs. Aryzta AG PK | Marfrig Global vs. The A2 Milk | Marfrig Global vs. BioAdaptives |
| NetSol Technologies vs. MIND CTI | NetSol Technologies vs. PDF Solutions | NetSol Technologies vs. Research Solutions | NetSol Technologies vs. Red Violet |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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