Correlation Between Marfrig Global and Teladoc Health

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

Diversification Opportunities for Marfrig Global and Teladoc Health

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between Marfrig and Teladoc is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Teladoc Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc Health 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 Teladoc Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc Health has no effect on the direction of Marfrig Global i.e., Marfrig Global and Teladoc Health go up and down completely randomly.

Pair Corralation between Marfrig Global and Teladoc Health

Assuming the 90 days trading horizon Marfrig Global Foods is expected to under-perform the Teladoc Health. But the stock apears to be less risky and, when comparing its historical volatility, Marfrig Global Foods is 1.22 times less risky than Teladoc Health. The stock trades about -0.26 of its potential returns per unit of risk. The Teladoc Health is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  196.00  in Teladoc Health on October 25, 2024 and sell it today you would lose (1.00) from holding Teladoc Health or give up 0.51% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Marfrig Global Foods  vs.  Teladoc Health

 Performance 
       Timeline  
Marfrig Global Foods 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 10 (%) 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.
Teladoc Health 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Teladoc Health are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Teladoc Health sustained solid returns over the last few months and may actually be approaching a breakup point.

Marfrig Global and Teladoc Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marfrig Global and Teladoc Health

The main advantage of trading using opposite Marfrig Global and Teladoc Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Teladoc Health 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 Teladoc Health will offset losses from the drop in Teladoc Health's long position.
The idea behind Marfrig Global Foods and Teladoc Health 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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