Correlation Between Marfrig Global and Viver Incorporadora

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

Diversification Opportunities for Marfrig Global and Viver Incorporadora

0.28

Correlation Coefficient

Marfrig Global  Viver Incorporadora

Modest diversification

The 3 months correlation between Marfrig and Viver is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Viver Incorporadora e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viver Incorporadora 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 Viver Incorporadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viver Incorporadora has no effect on the direction of Marfrig Global i.e., Marfrig Global and Viver Incorporadora go up and down completely randomly.

Pair Corralation between Marfrig Global and Viver Incorporadora

Assuming the 90 days trading horizon Marfrig Global Foods is expected to generate 1.22 times more return on investment than Viver Incorporadora. However, Marfrig Global is 1.22 times more volatile than Viver Incorporadora e. It trades about 0.06 of its potential returns per unit of risk. Viver Incorporadora e is currently generating about -0.07 per unit of risk. If you would invest  1,683  in Marfrig Global Foods on December 24, 2024 and sell it today you would earn a total of  138.00  from holding Marfrig Global Foods or generate 8.2% return on investment over 90 days.

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

Marfrig Global Foods  vs.  Viver Incorporadora e

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 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Viver Incorporadora

Risk-Adjusted Performance

Very Weak

Over the last 90 days Viver Incorporadora e has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Marfrig Global and Viver Incorporadora

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

The idea behind Marfrig Global Foods and Viver Incorporadora e 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.