Correlation Between Cemepe Investimentos and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both Cemepe Investimentos 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 Cemepe Investimentos and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cemepe Investimentos SA and Marfrig Global Foods, you can compare the effects of market volatilities on Cemepe Investimentos 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 Cemepe Investimentos with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cemepe Investimentos and Marfrig Global.
Diversification Opportunities for Cemepe Investimentos and Marfrig Global
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cemepe and Marfrig is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Cemepe Investimentos SA 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 Cemepe Investimentos 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 Cemepe Investimentos SA 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 Cemepe Investimentos i.e., Cemepe Investimentos and Marfrig Global go up and down completely randomly.
Pair Corralation between Cemepe Investimentos and Marfrig Global
Assuming the 90 days trading horizon Cemepe Investimentos SA is expected to generate 0.69 times more return on investment than Marfrig Global. However, Cemepe Investimentos SA is 1.44 times less risky than Marfrig Global. It trades about 0.24 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about -0.05 per unit of risk. If you would invest 499.00 in Cemepe Investimentos SA on October 10, 2024 and sell it today you would earn a total of 50.00 from holding Cemepe Investimentos SA or generate 10.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cemepe Investimentos SA vs. Marfrig Global Foods
Performance |
Timeline |
Cemepe Investimentos |
Marfrig Global Foods |
Cemepe Investimentos and Marfrig Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cemepe Investimentos and Marfrig Global
The main advantage of trading using opposite Cemepe Investimentos and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemepe Investimentos 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.Cemepe Investimentos vs. Annaly Capital Management, | Cemepe Investimentos vs. MAHLE Metal Leve | Cemepe Investimentos vs. United States Steel | Cemepe Investimentos vs. Ross Stores |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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