Correlation Between Marfrig Global and Torque Lifestyle
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Torque Lifestyle 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 Torque Lifestyle 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 Torque Lifestyle Brands, you can compare the effects of market volatilities on Marfrig Global and Torque Lifestyle 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 Torque Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Torque Lifestyle.
Diversification Opportunities for Marfrig Global and Torque Lifestyle
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marfrig and Torque is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Torque Lifestyle Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torque Lifestyle Brands 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 Torque Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torque Lifestyle Brands has no effect on the direction of Marfrig Global i.e., Marfrig Global and Torque Lifestyle go up and down completely randomly.
Pair Corralation between Marfrig Global and Torque Lifestyle
Assuming the 90 days horizon Marfrig Global is expected to generate 7.92 times less return on investment than Torque Lifestyle. But when comparing it to its historical volatility, Marfrig Global Foods is 17.18 times less risky than Torque Lifestyle. It trades about 0.37 of its potential returns per unit of risk. Torque Lifestyle Brands is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 0.16 in Torque Lifestyle Brands on September 13, 2024 and sell it today you would earn a total of 0.01 from holding Torque Lifestyle Brands or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Marfrig Global Foods vs. Torque Lifestyle Brands
Performance |
| Timeline |
| Marfrig Global Foods |
| Torque Lifestyle Brands |
Marfrig Global and Torque Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Torque Lifestyle
The main advantage of trading using opposite Marfrig Global and Torque Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Torque Lifestyle 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 Torque Lifestyle will offset losses from the drop in Torque Lifestyle'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 |
| Torque Lifestyle vs. Premier Foods Plc | Torque Lifestyle vs. Naturally Splendid Enterprises | Torque Lifestyle vs. Aryzta AG PK | Torque Lifestyle vs. The A2 Milk |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |