Correlation Between Kraft Heinz and Marfrig Global

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz 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 Kraft Heinz and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraft Heinz Co and Marfrig Global Foods, you can compare the effects of market volatilities on Kraft Heinz 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 Kraft Heinz with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and Marfrig Global.

Diversification Opportunities for Kraft Heinz and Marfrig Global

0.22
  Correlation Coefficient

Modest diversification

The 3 months correlation between Kraft and Marfrig is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co 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 Kraft Heinz 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 Kraft Heinz Co 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 Kraft Heinz i.e., Kraft Heinz and Marfrig Global go up and down completely randomly.

Pair Corralation between Kraft Heinz and Marfrig Global

Considering the 90-day investment horizon Kraft Heinz is expected to generate 1179.0 times less return on investment than Marfrig Global. But when comparing it to its historical volatility, Kraft Heinz Co is 2.93 times less risky than Marfrig Global. It trades about 0.0 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  126.00  in Marfrig Global Foods on January 19, 2024 and sell it today you would earn a total of  73.00  from holding Marfrig Global Foods or generate 57.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.6%
ValuesDaily Returns

Kraft Heinz Co  vs.  Marfrig Global Foods

 Performance 
       Timeline  
Kraft Heinz 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Kraft Heinz Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, Kraft Heinz is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Marfrig Global Foods 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Marfrig Global showed solid returns over the last few months and may actually be approaching a breakup point.

Kraft Heinz and Marfrig Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kraft Heinz and Marfrig Global

The main advantage of trading using opposite Kraft Heinz and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz 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 Kraft Heinz Co 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

Other Complementary Tools

Commodity Directory
Find actively traded commodities issued by global exchanges
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format