Correlation Between Marfrig Global and SP 500
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and SP 500 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 SP 500 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 SP 500 Energy, you can compare the effects of market volatilities on Marfrig Global and SP 500 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 SP 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and SP 500.
Diversification Opportunities for Marfrig Global and SP 500
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Marfrig and SPNY is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and SP 500 Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP 500 Energy 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 SP 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP 500 Energy has no effect on the direction of Marfrig Global i.e., Marfrig Global and SP 500 go up and down completely randomly.
Pair Corralation between Marfrig Global and SP 500
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 2.4 times more return on investment than SP 500. However, Marfrig Global is 2.4 times more volatile than SP 500 Energy. It trades about 0.18 of its potential returns per unit of risk. SP 500 Energy is currently generating about 0.09 per unit of risk. If you would invest 243.00 in Marfrig Global Foods on September 12, 2024 and sell it today you would earn a total of 84.00 from holding Marfrig Global Foods or generate 34.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. SP 500 Energy
Performance |
| Timeline |
Marfrig Global and SP 500 Volatility Contrast
Predicted Return Density |
| Returns |
Marfrig Global Foods
Pair trading matchups for Marfrig Global
SP 500 Energy
Pair trading matchups for SP 500
Pair Trading with Marfrig Global and SP 500
The main advantage of trading using opposite Marfrig Global and SP 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, SP 500 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 SP 500 will offset losses from the drop in SP 500'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 |
| SP 500 vs. Barrick Gold Corp | SP 500 vs. Harmony Gold Mining | SP 500 vs. Analog Devices | SP 500 vs. FARO Technologies |
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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