Correlation Between Marfrig Global and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and SEI Investments 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 SEI Investments 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 SEI Investments, you can compare the effects of market volatilities on Marfrig Global and SEI Investments 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 SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and SEI Investments.
Diversification Opportunities for Marfrig Global and SEI Investments
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marfrig and SEI is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments 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 SEI Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Investments has no effect on the direction of Marfrig Global i.e., Marfrig Global and SEI Investments go up and down completely randomly.
Pair Corralation between Marfrig Global and SEI Investments
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 2.96 times more return on investment than SEI Investments. However, Marfrig Global is 2.96 times more volatile than SEI Investments. It trades about 0.07 of its potential returns per unit of risk. SEI Investments is currently generating about 0.06 per unit of risk. If you would invest 130.00 in Marfrig Global Foods on August 25, 2024 and sell it today you would earn a total of 163.00 from holding Marfrig Global Foods or generate 125.38% 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. SEI Investments
Performance |
| Timeline |
| Marfrig Global Foods |
| SEI Investments |
Marfrig Global and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and SEI Investments
The main advantage of trading using opposite Marfrig Global and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, SEI Investments 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 SEI Investments will offset losses from the drop in SEI Investments' long position.| Marfrig Global vs. Artisan Consumer Goods | Marfrig Global vs. Aryzta AG PK | Marfrig Global vs. The A2 Milk | Marfrig Global vs. BioAdaptives |
| SEI Investments vs. PowerUp Acquisition Corp | SEI Investments vs. Aurora Innovation | SEI Investments vs. HUMANA INC | SEI Investments vs. Aquagold International |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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