Correlation Between Marfrig Global and VITAFOAM NIGERIA

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

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

Diversification Opportunities for Marfrig Global and VITAFOAM NIGERIA

0.2

Correlation Coefficient

Marfrig Global  VITAFOAM NIGERIA

Modest diversification

The 3 months correlation between Marfrig and VITAFOAM is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and VITAFOAM NIGERIA PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VITAFOAM NIGERIA PLC and Marfrig Global 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 Marfrig Global Foods are associated (or correlated) with VITAFOAM NIGERIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VITAFOAM NIGERIA PLC has no effect on the direction of Marfrig Global i.e., Marfrig Global and VITAFOAM NIGERIA go up and down completely randomly.

Pair Corralation between Marfrig Global and VITAFOAM NIGERIA

Assuming the 90 days horizon Marfrig Global is expected to generate 3.52 times less return on investment than VITAFOAM NIGERIA. In addition to that, Marfrig Global is 1.42 times more volatile than VITAFOAM NIGERIA PLC. It trades about 0.05 of its total potential returns per unit of risk. VITAFOAM NIGERIA PLC is currently generating about 0.24 per unit of volatility. If you would invest  4,755  in VITAFOAM NIGERIA PLC on May 4, 2025 and sell it today you would earn a total of  3,140  from holding VITAFOAM NIGERIA PLC or generate 66.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Marfrig Global Foods  vs.  VITAFOAM NIGERIA PLC

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 fairly weak basic indicators, Marfrig Global showed solid returns over the last few months and may actually be approaching a breakup point.

VITAFOAM NIGERIA PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VITAFOAM NIGERIA PLC are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, VITAFOAM NIGERIA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marfrig Global and VITAFOAM NIGERIA

The main advantage of trading using opposite Marfrig Global and VITAFOAM NIGERIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, VITAFOAM NIGERIA 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 VITAFOAM NIGERIA will offset losses from the drop in VITAFOAM NIGERIA's long position.

The idea behind Marfrig Global Foods and VITAFOAM NIGERIA PLC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.