Correlation Between Marfrig Global and Western Copper
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Western Copper 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 Western Copper 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 Western Copper and, you can compare the effects of market volatilities on Marfrig Global and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Western Copper.
Diversification Opportunities for Marfrig Global and Western Copper
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marfrig and Western is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Marfrig Global i.e., Marfrig Global and Western Copper go up and down completely randomly.
Pair Corralation between Marfrig Global and Western Copper
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 0.82 times more return on investment than Western Copper. However, Marfrig Global Foods is 1.22 times less risky than Western Copper. It trades about 0.29 of its potential returns per unit of risk. Western Copper and is currently generating about -0.01 per unit of risk. If you would invest 274.00 in Marfrig Global Foods on September 13, 2024 and sell it today you would earn a total of 49.00 from holding Marfrig Global Foods or generate 17.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. Western Copper and
Performance |
| Timeline |
| Marfrig Global Foods |
| Western Copper |
Marfrig Global and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Western Copper
The main advantage of trading using opposite Marfrig Global and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper'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 |
| Western Copper vs. MP Materials Corp | Western Copper vs. NioCorp Developments Ltd | Western Copper vs. Vale SA ADR | Western Copper vs. Vizsla Resources Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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