Correlation Between BRF SA and Guidemark(r) Large

Can any of the company-specific risk be diversified away by investing in both BRF SA and Guidemark(r) Large 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 BRF SA and Guidemark(r) Large into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BRF SA ADR and Guidemark Large Cap, you can compare the effects of market volatilities on BRF SA and Guidemark(r) Large 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 BRF SA with a short position of Guidemark(r) Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRF SA and Guidemark(r) Large.

Diversification Opportunities for BRF SA and Guidemark(r) Large

0.28

Correlation Coefficient

BRF SA  Guidemark(r) Large

Modest diversification

The 3 months correlation between BRF and Guidemark(r) is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding BRF SA ADR and Guidemark Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Large Cap and BRF SA 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 BRF SA ADR are associated (or correlated) with Guidemark(r) Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Large Cap has no effect on the direction of BRF SA i.e., BRF SA and Guidemark(r) Large go up and down completely randomly.

Pair Corralation between BRF SA and Guidemark(r) Large

Given the investment horizon of 90 days BRF SA ADR is expected to generate 1.46 times more return on investment than Guidemark(r) Large. However, BRF SA is 1.46 times more volatile than Guidemark Large Cap. It trades about 0.04 of its potential returns per unit of risk. Guidemark Large Cap is currently generating about 0.05 per unit of risk. If you would invest  347.00  in BRF SA ADR on March 20, 2025 and sell it today you would earn a total of  18.00  from holding BRF SA ADR or generate 5.19% return on investment over 90 days.

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

BRF SA ADR  vs.  Guidemark Large Cap

BRF SA ADR

Risk-Adjusted Performance

Weak

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

Guidemark Large Cap

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guidemark Large Cap are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Guidemark(r) Large may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with BRF SA and Guidemark(r) Large

The main advantage of trading using opposite BRF SA and Guidemark(r) Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRF SA position performs unexpectedly, Guidemark(r) Large 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 Guidemark(r) Large will offset losses from the drop in Guidemark(r) Large's long position.

The idea behind BRF SA ADR and Guidemark Large Cap 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.