Correlation Between Marfrig Global and Apeiron Capital

Can any of the company-specific risk be diversified away by investing in both Marfrig Global and Apeiron Capital 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 Apeiron Capital 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 Apeiron Capital Investment, you can compare the effects of market volatilities on Marfrig Global and Apeiron Capital 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 Apeiron Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Apeiron Capital.

Diversification Opportunities for Marfrig Global and Apeiron Capital

-0.35

Correlation Coefficient

Marfrig Global  Apeiron Capital

Very good diversification

The 3 months correlation between Marfrig and Apeiron is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Apeiron Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apeiron Capital Inve 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 Apeiron Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apeiron Capital Inve has no effect on the direction of Marfrig Global i.e., Marfrig Global and Apeiron Capital go up and down completely randomly.

Pair Corralation between Marfrig Global and Apeiron Capital

Assuming the 90 days horizon Marfrig Global Foods is expected to generate 5.78 times more return on investment than Apeiron Capital. However, Marfrig Global is 5.78 times more volatile than Apeiron Capital Investment. It trades about 0.05 of its potential returns per unit of risk. Apeiron Capital Investment is currently generating about -0.04 per unit of risk. If you would invest  157.00  in Marfrig Global Foods on October 11, 2024 and sell it today you would earn a total of  101.00  from holding Marfrig Global Foods or generate 64.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	10.51%
Values	Daily Returns

Marfrig Global Foods  vs.  Apeiron Capital Investment

Marfrig Global Foods

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Marfrig Global showed solid returns over the last few months and may actually be approaching a breakup point.

Apeiron Capital Inve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apeiron Capital Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Apeiron Capital is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Marfrig Global and Apeiron Capital

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

The idea behind Marfrig Global Foods and Apeiron Capital Investment 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.