Correlation Between Globus Medical, and Marfrig Global

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

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

Diversification Opportunities for Globus Medical, and Marfrig Global

0.93

Correlation Coefficient

Globus Medical,  Marfrig Global

Almost no diversification

The 3 months correlation between Globus and Marfrig is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Globus Medical, 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 Globus Medical, 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 Globus Medical, 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 Globus Medical, i.e., Globus Medical, and Marfrig Global go up and down completely randomly.

Pair Corralation between Globus Medical, and Marfrig Global

Assuming the 90 days trading horizon Globus Medical, is expected to generate 1.61 times less return on investment than Marfrig Global. But when comparing it to its historical volatility, Globus Medical, is 1.49 times less risky than Marfrig Global. It trades about 0.23 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,153  in Marfrig Global Foods on October 8, 2024 and sell it today you would earn a total of  532.00  from holding Marfrig Global Foods or generate 46.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Globus Medical,  vs.  Marfrig Global Foods

Globus Medical,

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Globus Medical, are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Globus Medical, sustained solid returns over the last few months and may actually be approaching a breakup point.

Marfrig Global Foods

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Marfrig Global unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globus Medical, and Marfrig Global

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

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.