Correlation Between NetSol Technologies and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both NetSol Technologies 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 NetSol Technologies and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NetSol Technologies and Marfrig Global Foods, you can compare the effects of market volatilities on NetSol Technologies 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 NetSol Technologies with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NetSol Technologies and Marfrig Global.
Diversification Opportunities for NetSol Technologies and Marfrig Global
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NetSol and Marfrig is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding NetSol Technologies 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 NetSol Technologies 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 NetSol Technologies 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 NetSol Technologies i.e., NetSol Technologies and Marfrig Global go up and down completely randomly.
Pair Corralation between NetSol Technologies and Marfrig Global
Given the investment horizon of 90 days NetSol Technologies is expected to under-perform the Marfrig Global. But the stock apears to be less risky and, when comparing its historical volatility, NetSol Technologies is 1.39 times less risky than Marfrig Global. The stock trades about -0.01 of its potential returns per unit of risk. The Marfrig Global Foods is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 197.00 in Marfrig Global Foods on June 2, 2024 and sell it today you would earn a total of 56.00 from holding Marfrig Global Foods or generate 28.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NetSol Technologies vs. Marfrig Global Foods
Performance |
Timeline |
NetSol Technologies |
Marfrig Global Foods |
NetSol Technologies and Marfrig Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NetSol Technologies and Marfrig Global
The main advantage of trading using opposite NetSol Technologies and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetSol Technologies 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.NetSol Technologies vs. Intuit Inc | NetSol Technologies vs. Snowflake | NetSol Technologies vs. ServiceNow | NetSol Technologies vs. Shopify |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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