Correlation Between Else Nutrition and Marfrig Global

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

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

Diversification Opportunities for Else Nutrition and Marfrig Global

-0.51

Correlation Coefficient

Else Nutrition  Marfrig Global

Excellent diversification

The 3 months correlation between Else and Marfrig is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Else Nutrition Holdings 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 Else Nutrition 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 Else Nutrition Holdings 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 Else Nutrition i.e., Else Nutrition and Marfrig Global go up and down completely randomly.

Pair Corralation between Else Nutrition and Marfrig Global

Assuming the 90 days horizon Else Nutrition Holdings is expected to under-perform the Marfrig Global. In addition to that, Else Nutrition is 3.7 times more volatile than Marfrig Global Foods. It trades about -0.01 of its total potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.07 per unit of volatility. If you would invest  196.00  in Marfrig Global Foods on October 22, 2024 and sell it today you would earn a total of  56.00  from holding Marfrig Global Foods or generate 28.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.2%
Values	Daily Returns

Else Nutrition Holdings  vs.  Marfrig Global Foods

Else Nutrition Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Else Nutrition Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Else Nutrition reported solid returns over the last few months and may actually be approaching a breakup point.

Marfrig Global Foods

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Marfrig Global is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Else Nutrition and Marfrig Global

The main advantage of trading using opposite Else Nutrition and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Else Nutrition 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 Else Nutrition Holdings 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.