Correlation Between Stagwell and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both Stagwell and Marfrig Global 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 Stagwell and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stagwell and Marfrig Global Foods, you can compare the effects of market volatilities on Stagwell and Marfrig Global 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 Stagwell with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stagwell and Marfrig Global.
Diversification Opportunities for Stagwell and Marfrig Global
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stagwell and Marfrig is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell and Marfrig Global Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfrig Global Foods and Stagwell 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 Stagwell are associated (or correlated) with Marfrig Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfrig Global Foods has no effect on the direction of Stagwell i.e., Stagwell and Marfrig Global go up and down completely randomly.
Pair Corralation between Stagwell and Marfrig Global
Given the investment horizon of 90 days Stagwell is expected to generate 1.13 times less return on investment than Marfrig Global. But when comparing it to its historical volatility, Stagwell is 1.06 times less risky than Marfrig Global. It trades about 0.07 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 191.00 in Marfrig Global Foods on September 2, 2024 and sell it today you would earn a total of 114.00 from holding Marfrig Global Foods or generate 59.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stagwell vs. Marfrig Global Foods
Performance |
| Timeline |
| Stagwell |
| Marfrig Global Foods |
Stagwell and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stagwell and Marfrig Global
The main advantage of trading using opposite Stagwell and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell position performs unexpectedly, Marfrig Global 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 Marfrig Global will offset losses from the drop in Marfrig Global's long position.| Stagwell vs. ADTRAN Inc | Stagwell vs. Belden Inc | Stagwell vs. ADC Therapeutics SA | Stagwell vs. Comtech Telecommunications Corp |
| Marfrig Global vs. The A2 Milk | Marfrig Global vs. Artisan Consumer Goods | Marfrig Global vs. General Mills |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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