Correlation Between SLC Agrcola and Marfrig Global

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

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

Diversification Opportunities for SLC Agrcola and Marfrig Global

-0.25

Correlation Coefficient

SLC Agrcola  Marfrig Global

Very good diversification

The 3 months correlation between SLC and Marfrig is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding SLC Agrcola 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 SLC Agrcola 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 SLC Agrcola 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 SLC Agrcola i.e., SLC Agrcola and Marfrig Global go up and down completely randomly.

Pair Corralation between SLC Agrcola and Marfrig Global

Assuming the 90 days trading horizon SLC Agrcola SA is expected to under-perform the Marfrig Global. But the stock apears to be less risky and, when comparing its historical volatility, SLC Agrcola SA is 3.4 times less risky than Marfrig Global. The stock trades about -0.12 of its potential returns per unit of risk. The Marfrig Global Foods is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,107  in Marfrig Global Foods on April 24, 2025 and sell it today you would earn a total of  193.00  from holding Marfrig Global Foods or generate 9.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

SLC Agrcola SA  vs.  Marfrig Global Foods

SLC Agrcola SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days SLC Agrcola SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Marfrig Global unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SLC Agrcola and Marfrig Global

The main advantage of trading using opposite SLC Agrcola and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLC Agrcola 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 SLC Agrcola 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.