Correlation Between Marfrig Global and APPLE

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Can any of the company-specific risk be diversified away by investing in both Marfrig Global and APPLE 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 APPLE 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 APPLE INC, you can compare the effects of market volatilities on Marfrig Global and APPLE 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 APPLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and APPLE.

Diversification Opportunities for Marfrig Global and APPLE

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Marfrig and APPLE is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and APPLE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLE INC 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 APPLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLE INC has no effect on the direction of Marfrig Global i.e., Marfrig Global and APPLE go up and down completely randomly.

Pair Corralation between Marfrig Global and APPLE

Assuming the 90 days horizon Marfrig Global Foods is expected to generate 2.76 times more return on investment than APPLE. However, Marfrig Global is 2.76 times more volatile than APPLE INC. It trades about 0.28 of its potential returns per unit of risk. APPLE INC is currently generating about -0.07 per unit of risk. If you would invest  255.00  in Marfrig Global Foods on August 27, 2024 and sell it today you would earn a total of  53.00  from holding Marfrig Global Foods or generate 20.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Marfrig Global Foods  vs.  APPLE INC

 Performance 
       Timeline  
Marfrig Global Foods 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Marfrig Global showed solid returns over the last few months and may actually be approaching a breakup point.
APPLE INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days APPLE INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for APPLE INC investors.

Marfrig Global and APPLE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marfrig Global and APPLE

The main advantage of trading using opposite Marfrig Global and APPLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, APPLE 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 APPLE will offset losses from the drop in APPLE's long position.
The idea behind Marfrig Global Foods and APPLE INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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