Correlation Between AP Mller and Marfrig Global

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

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

Diversification Opportunities for AP Mller and Marfrig Global

0.24

Correlation Coefficient

AP Mller  Marfrig Global

Modest diversification

The 3 months correlation between AMKBF and Marfrig is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller 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 AP Mller 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 AP Mller 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 AP Mller i.e., AP Mller and Marfrig Global go up and down completely randomly.

Pair Corralation between AP Mller and Marfrig Global

Assuming the 90 days horizon AP Mller is expected to generate 0.68 times more return on investment than Marfrig Global. However, AP Mller is 1.48 times less risky than Marfrig Global. It trades about 0.1 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about -0.01 per unit of risk. If you would invest  181,623  in AP Mller on June 29, 2025 and sell it today you would earn a total of  26,471  from holding AP Mller or generate 14.57% return on investment over 90 days.

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

AP Mller   vs.  Marfrig Global Foods

AP Mller

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in AP Mller are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental drivers, AP Mller reported solid returns over the last few months and may actually be approaching a breakup point.

Marfrig Global Foods

Risk-Adjusted Performance

Weakest

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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AP Mller and Marfrig Global

The main advantage of trading using opposite AP Mller and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Mller 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 AP Mller 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.