Correlation Between Marfrig Global and Proficient Auto

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

Diversification Opportunities for Marfrig Global and Proficient Auto

-0.15

Correlation Coefficient

Marfrig Global  Proficient Auto

Good diversification

The 3 months correlation between Marfrig and Proficient is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Proficient Auto Logistics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proficient Auto Logi 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 Proficient Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proficient Auto Logi has no effect on the direction of Marfrig Global i.e., Marfrig Global and Proficient Auto go up and down completely randomly.

Pair Corralation between Marfrig Global and Proficient Auto

Assuming the 90 days horizon Marfrig Global is expected to generate 1.15 times less return on investment than Proficient Auto. In addition to that, Marfrig Global is 1.15 times more volatile than Proficient Auto Logistics,. It trades about 0.08 of its total potential returns per unit of risk. Proficient Auto Logistics, is currently generating about 0.1 per unit of volatility. If you would invest  768.00  in Proficient Auto Logistics, on December 22, 2024 and sell it today you would earn a total of  221.00  from holding Proficient Auto Logistics, or generate 28.78% return on investment over 90 days.

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

Marfrig Global Foods  vs.  Proficient Auto Logistics,

Marfrig Global Foods

Risk-Adjusted Performance

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.

Proficient Auto Logi

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Proficient Auto Logistics, are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Proficient Auto disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marfrig Global and Proficient Auto

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

The idea behind Marfrig Global Foods and Proficient Auto Logistics, 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.