Correlation Between Marfrig Global and GoPro

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

Diversification Opportunities for Marfrig Global and GoPro

0.51

Correlation Coefficient

Marfrig Global  GoPro

Very weak diversification

The 3 months correlation between Marfrig and GoPro is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and GoPro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoPro Inc 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 GoPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoPro Inc has no effect on the direction of Marfrig Global i.e., Marfrig Global and GoPro go up and down completely randomly.

Pair Corralation between Marfrig Global and GoPro

Assuming the 90 days trading horizon Marfrig Global Foods is expected to generate 0.81 times more return on investment than GoPro. However, Marfrig Global Foods is 1.24 times less risky than GoPro. It trades about 0.06 of its potential returns per unit of risk. GoPro Inc is currently generating about -0.13 per unit of risk. If you would invest  1,666  in Marfrig Global Foods on December 23, 2024 and sell it today you would earn a total of  155.00  from holding Marfrig Global Foods or generate 9.3% return on investment over 90 days.

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

Marfrig Global Foods  vs.  GoPro Inc

Marfrig Global Foods

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 4 (%) 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.

GoPro Inc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Marfrig Global and GoPro

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

The idea behind Marfrig Global Foods and GoPro Inc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..