Correlation Between NESNVX and Marfrig Global

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

By analyzing existing cross correlation between NESNVX 625 15 JAN 26 and Marfrig Global Foods, you can compare the effects of market volatilities on NESNVX 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 NESNVX with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NESNVX and Marfrig Global.

Diversification Opportunities for NESNVX and Marfrig Global

0.0

Correlation Coefficient

NESNVX  Marfrig Global

Pay attention - limited upside

The 3 months correlation between NESNVX and Marfrig is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NESNVX 625 15 JAN 26 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 NESNVX 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 NESNVX 625 15 JAN 26 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 NESNVX i.e., NESNVX and Marfrig Global go up and down completely randomly.

Pair Corralation between NESNVX and Marfrig Global

If you would invest  231.00  in Marfrig Global Foods on October 9, 2024 and sell it today you would earn a total of  30.00  from holding Marfrig Global Foods or generate 12.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

NESNVX 625 15 JAN 26  vs.  Marfrig Global Foods

NESNVX 625 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 625 15 JAN 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NESNVX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with NESNVX and Marfrig Global

The main advantage of trading using opposite NESNVX and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NESNVX 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 NESNVX 625 15 JAN 26 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.