Correlation Between Marfrig Global and Old Republic
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Old Republic 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 Old Republic 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 Old Republic International, you can compare the effects of market volatilities on Marfrig Global and Old Republic 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 Old Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Old Republic.
Diversification Opportunities for Marfrig Global and Old Republic
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marfrig and Old is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Old Republic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Republic Interna 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 Old Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Republic Interna has no effect on the direction of Marfrig Global i.e., Marfrig Global and Old Republic go up and down completely randomly.
Pair Corralation between Marfrig Global and Old Republic
Assuming the 90 days horizon Marfrig Global Foods is expected to under-perform the Old Republic. In addition to that, Marfrig Global is 3.64 times more volatile than Old Republic International. It trades about -0.02 of its total potential returns per unit of risk. Old Republic International is currently generating about 0.21 per unit of volatility. If you would invest 3,625 in Old Republic International on December 4, 2024 and sell it today you would earn a total of 162.00 from holding Old Republic International or generate 4.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Marfrig Global Foods vs. Old Republic International
Performance |
Timeline |
Marfrig Global Foods |
Old Republic Interna |
Marfrig Global and Old Republic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Marfrig Global and Old Republic
The main advantage of trading using opposite Marfrig Global and Old Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, Old Republic 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 Old Republic will offset losses from the drop in Old Republic's long position.Marfrig Global vs. BRF SA ADR | Marfrig Global vs. Pilgrims Pride Corp | Marfrig Global vs. John B Sanfilippo | Marfrig Global vs. Seneca Foods Corp |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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