Correlation Between Marfrig Global and Pinterest

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

Diversification Opportunities for Marfrig Global and Pinterest

-0.43

Correlation Coefficient

Marfrig Global  Pinterest

Very good diversification

The 3 months correlation between Marfrig and Pinterest is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Marfrig Global i.e., Marfrig Global and Pinterest go up and down completely randomly.

Pair Corralation between Marfrig Global and Pinterest

Assuming the 90 days horizon Marfrig Global Foods is expected to generate 1.37 times more return on investment than Pinterest. However, Marfrig Global is 1.37 times more volatile than Pinterest. It trades about 0.0 of its potential returns per unit of risk. Pinterest is currently generating about -0.04 per unit of risk. If you would invest  270.00  in Marfrig Global Foods on October 1, 2024 and sell it today you would lose (8.00) from holding Marfrig Global Foods or give up 2.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.62%
Values	Daily Returns

Marfrig Global Foods  vs.  Pinterest

Marfrig Global Foods

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Marfrig Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pinterest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pinterest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Marfrig Global and Pinterest

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

The idea behind Marfrig Global Foods and Pinterest 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.