Correlation Between NetSol Technologies and Marfrig Global

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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

-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between NetSol and Marfrig is -0.2. 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 generate 1.0 times more return on investment than Marfrig Global. However, NetSol Technologies is 1.0 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 -0.04 per unit of risk. If you would invest  394.00  in NetSol Technologies on November 24, 2023 and sell it today you would lose (100.00) from holding NetSol Technologies or give up 25.38% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

NetSol Technologies  vs.  Marfrig Global Foods

 Performance 
       Timeline  
NetSol Technologies 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in NetSol Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, NetSol Technologies disclosed solid returns over the last few months and may actually be approaching a breakup point.
Marfrig Global Foods 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Marfrig Global Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Marfrig Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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.
The idea behind NetSol Technologies 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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