Correlation Between Marfrig Global and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and KeyCorp 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 Marfrig Global and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marfrig Global Foods and KeyCorp, you can compare the effects of market volatilities on Marfrig Global and KeyCorp 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 Marfrig Global with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and KeyCorp.
Diversification Opportunities for Marfrig Global and KeyCorp
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Marfrig and KeyCorp is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Marfrig Global 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 Marfrig Global Foods are associated (or correlated) with KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of Marfrig Global i.e., Marfrig Global and KeyCorp go up and down completely randomly.
Pair Corralation between Marfrig Global and KeyCorp
Assuming the 90 days trading horizon Marfrig Global Foods is expected to generate 1.93 times more return on investment than KeyCorp. However, Marfrig Global is 1.93 times more volatile than KeyCorp. It trades about 0.1 of its potential returns per unit of risk. KeyCorp is currently generating about -0.15 per unit of risk. If you would invest 1,573 in Marfrig Global Foods on September 25, 2024 and sell it today you would earn a total of 93.00 from holding Marfrig Global Foods or generate 5.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Marfrig Global Foods vs. KeyCorp
Performance |
Timeline |
Marfrig Global Foods |
KeyCorp |
Marfrig Global and KeyCorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Marfrig Global and KeyCorp
The main advantage of trading using opposite Marfrig Global and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, KeyCorp 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 KeyCorp will offset losses from the drop in KeyCorp's long position.Marfrig Global vs. Lojas Renner SA | Marfrig Global vs. Hypera SA | Marfrig Global vs. Fleury SA | Marfrig Global vs. Localiza Rent a |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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