Correlation Between Marfrig Global and Hain Celestial

Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Hain Celestial 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 Hain Celestial 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 The Hain Celestial, you can compare the effects of market volatilities on Marfrig Global and Hain Celestial 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 Hain Celestial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Hain Celestial.

Diversification Opportunities for Marfrig Global and Hain Celestial

-0.22

Correlation Coefficient

Marfrig Global  Hain Celestial

Very good diversification

The 3 months correlation between Marfrig and Hain is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and The Hain Celestial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hain Celestial 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 Hain Celestial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hain Celestial has no effect on the direction of Marfrig Global i.e., Marfrig Global and Hain Celestial go up and down completely randomly.

Pair Corralation between Marfrig Global and Hain Celestial

Assuming the 90 days horizon Marfrig Global Foods is expected to generate 0.82 times more return on investment than Hain Celestial. However, Marfrig Global Foods is 1.22 times less risky than Hain Celestial. It trades about 0.18 of its potential returns per unit of risk. The Hain Celestial is currently generating about 0.02 per unit of risk. If you would invest  256.00  in Marfrig Global Foods on September 14, 2024 and sell it today you would earn a total of  92.00  from holding Marfrig Global Foods or generate 35.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Marfrig Global Foods  vs.  The Hain Celestial

Marfrig Global Foods

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Marfrig Global showed solid returns over the last few months and may actually be approaching a breakup point.

Hain Celestial

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Hain Celestial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Hain Celestial is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Marfrig Global and Hain Celestial

The main advantage of trading using opposite Marfrig Global and Hain Celestial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Hain Celestial 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 Hain Celestial will offset losses from the drop in Hain Celestial's long position.

The idea behind Marfrig Global Foods and The Hain Celestial 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.