Correlation Between Marfrig Global and Papaya Growth
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Papaya Growth 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 Papaya Growth 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 Papaya Growth Opportunity, you can compare the effects of market volatilities on Marfrig Global and Papaya Growth 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 Papaya Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Papaya Growth.
Diversification Opportunities for Marfrig Global and Papaya Growth
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Marfrig and Papaya is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Papaya Growth Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Papaya Growth Opportunity 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 Papaya Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Papaya Growth Opportunity has no effect on the direction of Marfrig Global i.e., Marfrig Global and Papaya Growth go up and down completely randomly.
Pair Corralation between Marfrig Global and Papaya Growth
If you would invest 263.00 in Marfrig Global Foods on September 2, 2024 and sell it today you would earn a total of 42.00 from holding Marfrig Global Foods or generate 15.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. Papaya Growth Opportunity
Performance |
| Timeline |
| Marfrig Global Foods |
| Papaya Growth Opportunity |
Marfrig Global and Papaya Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Papaya Growth
The main advantage of trading using opposite Marfrig Global and Papaya Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Papaya Growth 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 Papaya Growth will offset losses from the drop in Papaya Growth's long position.| Marfrig Global vs. The A2 Milk | Marfrig Global vs. Artisan Consumer Goods | Marfrig Global vs. General Mills |
| Papaya Growth vs. Life Time Group | Papaya Growth vs. Acco Brands | Papaya Growth vs. Afya | Papaya Growth vs. Bright Scholar Education |
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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