Correlation Between Marfrig Global and Serina Therapeutics

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

Diversification Opportunities for Marfrig Global and Serina Therapeutics

-0.73

Correlation Coefficient

Marfrig Global  Serina Therapeutics

Pay attention - limited upside

The 3 months correlation between Marfrig and Serina is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Serina Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serina Therapeutics 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 Serina Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serina Therapeutics has no effect on the direction of Marfrig Global i.e., Marfrig Global and Serina Therapeutics go up and down completely randomly.

Pair Corralation between Marfrig Global and Serina Therapeutics

Assuming the 90 days horizon Marfrig Global Foods is expected to generate 0.45 times more return on investment than Serina Therapeutics. However, Marfrig Global Foods is 2.23 times less risky than Serina Therapeutics. It trades about 0.05 of its potential returns per unit of risk. Serina Therapeutics is currently generating about -0.01 per unit of risk. If you would invest  164.00  in Marfrig Global Foods on October 4, 2024 and sell it today you would earn a total of  111.00  from holding Marfrig Global Foods or generate 67.68% return on investment over 90 days.

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

Marfrig Global Foods  vs.  Serina Therapeutics

Marfrig Global Foods

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 5 (%) 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.

Serina Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Serina Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Marfrig Global and Serina Therapeutics

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

The idea behind Marfrig Global Foods and Serina Therapeutics 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.