Correlation Between Sendas Distribuidora and Marfrig Global

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

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

Diversification Opportunities for Sendas Distribuidora and Marfrig Global

0.79

Correlation Coefficient

Sendas Distribuidora  Marfrig Global

Poor diversification

The 3 months correlation between Sendas and Marfrig is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sendas Distribuidora SA 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 Sendas Distribuidora 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 Sendas Distribuidora SA 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 Sendas Distribuidora i.e., Sendas Distribuidora and Marfrig Global go up and down completely randomly.

Pair Corralation between Sendas Distribuidora and Marfrig Global

Assuming the 90 days trading horizon Sendas Distribuidora SA is expected to generate 0.68 times more return on investment than Marfrig Global. However, Sendas Distribuidora SA is 1.48 times less risky than Marfrig Global. It trades about 0.08 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.05 per unit of risk. If you would invest  869.00  in Sendas Distribuidora SA on April 23, 2025 and sell it today you would earn a total of  94.00  from holding Sendas Distribuidora SA or generate 10.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Sendas Distribuidora SA  vs.  Marfrig Global Foods

Sendas Distribuidora

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sendas Distribuidora SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Sendas Distribuidora may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Marfrig Global Foods

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Marfrig Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Sendas Distribuidora and Marfrig Global

The main advantage of trading using opposite Sendas Distribuidora and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sendas Distribuidora 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 Sendas Distribuidora SA 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.