Correlation Between Western Acquisition and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both Western Acquisition 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 Western Acquisition and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Acquisition Ventures and Marfrig Global Foods, you can compare the effects of market volatilities on Western Acquisition 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 Western Acquisition with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Acquisition and Marfrig Global.
Diversification Opportunities for Western Acquisition and Marfrig Global
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and Marfrig is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures 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 Western Acquisition 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 Western Acquisition Ventures 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 Western Acquisition i.e., Western Acquisition and Marfrig Global go up and down completely randomly.
Pair Corralation between Western Acquisition and Marfrig Global
Given the investment horizon of 90 days Western Acquisition Ventures is expected to under-perform the Marfrig Global. But the stock apears to be less risky and, when comparing its historical volatility, Western Acquisition Ventures is 1.62 times less risky than Marfrig Global. The stock trades about -0.17 of its potential returns per unit of risk. The Marfrig Global Foods is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 255.00 in Marfrig Global Foods on August 28, 2024 and sell it today you would earn a total of 53.00 from holding Marfrig Global Foods or generate 20.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Acquisition Ventures vs. Marfrig Global Foods
Performance |
| Timeline |
| Western Acquisition |
| Marfrig Global Foods |
Western Acquisition and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Acquisition and Marfrig Global
The main advantage of trading using opposite Western Acquisition and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Acquisition 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.| Western Acquisition vs. PowerUp Acquisition Corp | Western Acquisition vs. Aurora Innovation | Western Acquisition vs. HUMANA INC | Western Acquisition vs. Aquagold International |
| Marfrig Global vs. Artisan Consumer Goods | Marfrig Global vs. The A2 Milk | Marfrig Global vs. BioAdaptives | 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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