Correlation Between CSS Industries and Marfrig Global

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

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

Diversification Opportunities for CSS Industries and Marfrig Global

0.0

Correlation Coefficient

CSS Industries  Marfrig Global

Pay attention - limited upside

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

Pair Corralation between CSS Industries and Marfrig Global

If you would invest (100.00) in CSS Industries on January 30, 2024 and sell it today you would earn a total of  100.00  from holding CSS Industries or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CSS Industries  vs.  Marfrig Global Foods

CSS Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSS Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CSS Industries is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 conflicting basic indicators, Marfrig Global may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with CSS Industries and Marfrig Global

The main advantage of trading using opposite CSS Industries and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSS Industries 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 CSS Industries 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.

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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.