Correlation Between Marfrig Global and Energold Drilling

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

Diversification Opportunities for Marfrig Global and Energold Drilling

0.0

Correlation Coefficient

Marfrig Global  Energold Drilling

Pay attention - limited upside

The 3 months correlation between Marfrig and Energold is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Energold Drilling Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energold Drilling Corp 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 Energold Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energold Drilling Corp has no effect on the direction of Marfrig Global i.e., Marfrig Global and Energold Drilling go up and down completely randomly.

Pair Corralation between Marfrig Global and Energold Drilling

If you would invest  0.00  in Energold Drilling Corp on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Energold Drilling Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Marfrig Global Foods  vs.  Energold Drilling Corp

Marfrig Global Foods

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Marfrig Global showed solid returns over the last few months and may actually be approaching a breakup point.

Energold Drilling Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energold Drilling Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Energold Drilling is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Marfrig Global and Energold Drilling

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

The idea behind Marfrig Global Foods and Energold Drilling Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.