Correlation Between 78490FLW7 and Marfrig Global

Can any of the company-specific risk be diversified away by investing in both 78490FLW7 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 78490FLW7 and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US78490FLW76 and Marfrig Global Foods, you can compare the effects of market volatilities on 78490FLW7 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 78490FLW7 with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of 78490FLW7 and Marfrig Global.

Diversification Opportunities for 78490FLW7 and Marfrig Global

0.56

Correlation Coefficient

78490FLW7  Marfrig Global

Very weak diversification

The 3 months correlation between 78490FLW7 and Marfrig is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding US78490FLW76 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 78490FLW7 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 US78490FLW76 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 78490FLW7 i.e., 78490FLW7 and Marfrig Global go up and down completely randomly.

Pair Corralation between 78490FLW7 and Marfrig Global

Assuming the 90 days trading horizon US78490FLW76 is expected to under-perform the Marfrig Global. In addition to that, 78490FLW7 is 1.48 times more volatile than Marfrig Global Foods. It trades about -0.05 of its total potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.04 per unit of volatility. If you would invest  246.00  in Marfrig Global Foods on September 28, 2024 and sell it today you would earn a total of  14.00  from holding Marfrig Global Foods or generate 5.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	41.94%
Values	Daily Returns

US78490FLW76  vs.  Marfrig Global Foods

US78490FLW76

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US78490FLW76 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for US78490FLW76 investors.

Marfrig Global Foods

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Marfrig Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with 78490FLW7 and Marfrig Global

The main advantage of trading using opposite 78490FLW7 and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 78490FLW7 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 US78490FLW76 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.