Correlation Between NWIDE and Marfrig Global
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By analyzing existing cross correlation between NWIDE 4 14 SEP 26 and Marfrig Global Foods, you can compare the effects of market volatilities on NWIDE 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 NWIDE with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NWIDE and Marfrig Global.
Diversification Opportunities for NWIDE and Marfrig Global
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NWIDE and Marfrig is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding NWIDE 4 14 SEP 26 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 NWIDE 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 NWIDE 4 14 SEP 26 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 NWIDE i.e., NWIDE and Marfrig Global go up and down completely randomly.
Pair Corralation between NWIDE and Marfrig Global
Assuming the 90 days trading horizon NWIDE is expected to generate 14.65 times less return on investment than Marfrig Global. But when comparing it to its historical volatility, NWIDE 4 14 SEP 26 is 3.77 times less risky than Marfrig Global. It trades about 0.02 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 125.00 in Marfrig Global Foods on September 12, 2024 and sell it today you would earn a total of 202.00 from holding Marfrig Global Foods or generate 161.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 24.29% |
| Values | Daily Returns |
NWIDE 4 14 SEP 26 vs. Marfrig Global Foods
Performance |
| Timeline |
| NWIDE 4 14 |
| Marfrig Global Foods |
NWIDE and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NWIDE and Marfrig Global
The main advantage of trading using opposite NWIDE and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NWIDE 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.The idea behind NWIDE 4 14 SEP 26 and Marfrig Global Foods 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.| Marfrig Global vs. BRF SA ADR | Marfrig Global vs. Pilgrims Pride Corp | Marfrig Global vs. John B Sanfilippo | Marfrig Global 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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