Correlation Between NuRAN Wireless and Marfrig Global

Can any of the company-specific risk be diversified away by investing in both NuRAN Wireless and Marfrig Global 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 NuRAN Wireless and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NuRAN Wireless and Marfrig Global Foods, you can compare the effects of market volatilities on NuRAN Wireless and Marfrig Global 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 NuRAN Wireless with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NuRAN Wireless and Marfrig Global.

Diversification Opportunities for NuRAN Wireless and Marfrig Global

-0.58

Correlation Coefficient

NuRAN Wireless  Marfrig Global

Excellent diversification

The 3 months correlation between NuRAN and Marfrig is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding NuRAN Wireless and Marfrig Global Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfrig Global Foods and NuRAN Wireless 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 NuRAN Wireless are associated (or correlated) with Marfrig Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfrig Global Foods has no effect on the direction of NuRAN Wireless i.e., NuRAN Wireless and Marfrig Global go up and down completely randomly.

Pair Corralation between NuRAN Wireless and Marfrig Global

Assuming the 90 days horizon NuRAN Wireless is expected to generate 0.76 times more return on investment than Marfrig Global. However, NuRAN Wireless is 1.32 times less risky than Marfrig Global. It trades about -0.16 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about -0.14 per unit of risk. If you would invest  6.53  in NuRAN Wireless on September 22, 2024 and sell it today you would lose (0.79) from holding NuRAN Wireless or give up 12.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

NuRAN Wireless  vs.  Marfrig Global Foods

NuRAN Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NuRAN Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Marfrig Global Foods

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Marfrig Global is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NuRAN Wireless and Marfrig Global

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

The idea behind NuRAN Wireless and Marfrig Global Foods 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.