Correlation Between Pilgrims Pride and BRF SA
Can any of the company-specific risk be diversified away by investing in both Pilgrims Pride and BRF SA 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 Pilgrims Pride and BRF SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pilgrims Pride Corp and BRF SA ADR, you can compare the effects of market volatilities on Pilgrims Pride and BRF SA 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 Pilgrims Pride with a short position of BRF SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pilgrims Pride and BRF SA.
Diversification Opportunities for Pilgrims Pride and BRF SA
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pilgrims and BRF is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Pilgrims Pride Corp and BRF SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRF SA ADR and Pilgrims Pride 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 Pilgrims Pride Corp are associated (or correlated) with BRF SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRF SA ADR has no effect on the direction of Pilgrims Pride i.e., Pilgrims Pride and BRF SA go up and down completely randomly.
Pair Corralation between Pilgrims Pride and BRF SA
Considering the 90-day investment horizon Pilgrims Pride Corp is expected to generate 0.71 times more return on investment than BRF SA. However, Pilgrims Pride Corp is 1.42 times less risky than BRF SA. It trades about -0.04 of its potential returns per unit of risk. BRF SA ADR is currently generating about -0.16 per unit of risk. If you would invest 4,723 in Pilgrims Pride Corp on November 3, 2024 and sell it today you would lose (69.00) from holding Pilgrims Pride Corp or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pilgrims Pride Corp vs. BRF SA ADR
Performance |
| Timeline |
| Pilgrims Pride Corp |
| BRF SA ADR |
Pilgrims Pride and BRF SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pilgrims Pride and BRF SA
The main advantage of trading using opposite Pilgrims Pride and BRF SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pilgrims Pride position performs unexpectedly, BRF SA 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 BRF SA will offset losses from the drop in BRF SA's long position.| Pilgrims Pride vs. Bellring Brands LLC | Pilgrims Pride vs. Treehouse Foods | Pilgrims Pride vs. Ingredion Incorporated | Pilgrims Pride vs. JM Smucker |
| BRF SA vs. Marfrig Global Foods | BRF SA vs. Pilgrims Pride Corp | BRF SA vs. John B Sanfilippo | BRF SA vs. Seneca Foods 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |