Correlation Between Marfrig Global and Planet 13
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Planet 13 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 Planet 13 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 Planet 13 Holdings, you can compare the effects of market volatilities on Marfrig Global and Planet 13 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 Planet 13. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Planet 13.
Diversification Opportunities for Marfrig Global and Planet 13
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Marfrig and Planet is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Planet 13 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet 13 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 Planet 13. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet 13 Holdings has no effect on the direction of Marfrig Global i.e., Marfrig Global and Planet 13 go up and down completely randomly.
Pair Corralation between Marfrig Global and Planet 13
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 0.57 times more return on investment than Planet 13. However, Marfrig Global Foods is 1.74 times less risky than Planet 13. It trades about 0.09 of its potential returns per unit of risk. Planet 13 Holdings is currently generating about -0.02 per unit of risk. If you would invest 191.00 in Marfrig Global Foods on September 14, 2024 and sell it today you would earn a total of 157.00 from holding Marfrig Global Foods or generate 82.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. Planet 13 Holdings
Performance |
| Timeline |
| Marfrig Global Foods |
| Planet 13 Holdings |
Marfrig Global and Planet 13 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Planet 13
The main advantage of trading using opposite Marfrig Global and Planet 13 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Planet 13 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 Planet 13 will offset losses from the drop in Planet 13'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 |
| Planet 13 vs. Marfrig Global Foods | Planet 13 vs. Newpark Resources | Planet 13 vs. NH Foods Ltd | Planet 13 vs. AMCON Distributing |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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