Correlation Between CM Hospitalar and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both CM Hospitalar 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 CM Hospitalar and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CM Hospitalar SA and Marfrig Global Foods, you can compare the effects of market volatilities on CM Hospitalar 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 CM Hospitalar with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM Hospitalar and Marfrig Global.
Diversification Opportunities for CM Hospitalar and Marfrig Global
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VVEO3 and Marfrig is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CM Hospitalar SA 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 CM Hospitalar 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 CM Hospitalar SA 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 CM Hospitalar i.e., CM Hospitalar and Marfrig Global go up and down completely randomly.
Pair Corralation between CM Hospitalar and Marfrig Global
Assuming the 90 days trading horizon CM Hospitalar is expected to generate 2.11 times less return on investment than Marfrig Global. In addition to that, CM Hospitalar is 2.12 times more volatile than Marfrig Global Foods. It trades about 0.07 of its total potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.29 per unit of volatility. If you would invest 1,384 in Marfrig Global Foods on August 28, 2024 and sell it today you would earn a total of 446.00 from holding Marfrig Global Foods or generate 32.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CM Hospitalar SA vs. Marfrig Global Foods
Performance |
| Timeline |
| CM Hospitalar SA |
| Marfrig Global Foods |
CM Hospitalar and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM Hospitalar and Marfrig Global
The main advantage of trading using opposite CM Hospitalar and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM Hospitalar 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.| CM Hospitalar vs. Dell Technologies | CM Hospitalar vs. Technos SA | CM Hospitalar vs. Brpr Corporate Offices | CM Hospitalar vs. salesforce inc |
| Marfrig Global vs. Minerva SA | Marfrig Global vs. Companhia Siderrgica Nacional | Marfrig Global vs. Cyrela Brazil Realty |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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