Correlation Between Marfrig Global and WH Group
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and WH Group 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 WH Group 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 WH Group Limited, you can compare the effects of market volatilities on Marfrig Global and WH Group 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 WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and WH Group.
Diversification Opportunities for Marfrig Global and WH Group
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Marfrig and WHGRF is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and WH Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group Limited 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 WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group Limited has no effect on the direction of Marfrig Global i.e., Marfrig Global and WH Group go up and down completely randomly.
Pair Corralation between Marfrig Global and WH Group
Assuming the 90 days horizon Marfrig Global is expected to generate 5.93 times less return on investment than WH Group. But when comparing it to its historical volatility, Marfrig Global Foods is 4.91 times less risky than WH Group. It trades about 0.08 of its potential returns per unit of risk. WH Group Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 27.00 in WH Group Limited on August 31, 2024 and sell it today you would earn a total of 52.00 from holding WH Group Limited or generate 192.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 54.16% |
| Values | Daily Returns |
Marfrig Global Foods vs. WH Group Limited
Performance |
| Timeline |
| Marfrig Global Foods |
| WH Group Limited |
Marfrig Global and WH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and WH Group
The main advantage of trading using opposite Marfrig Global and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, WH Group 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 WH Group will offset losses from the drop in WH Group's long position.| Marfrig Global vs. The A2 Milk | Marfrig Global vs. Altavoz Entertainment | Marfrig Global vs. Artisan Consumer Goods | Marfrig Global vs. General Mills |
| WH Group vs. Premier Foods Plc | WH Group vs. Torque Lifestyle Brands | WH Group vs. Naturally Splendid Enterprises | WH Group vs. Aryzta AG PK |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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