Correlation Between Porto Seguro and Archer Daniels

Can any of the company-specific risk be diversified away by investing in both Porto Seguro and Archer Daniels 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 Porto Seguro and Archer Daniels into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Porto Seguro SA and Archer Daniels Midland, you can compare the effects of market volatilities on Porto Seguro and Archer Daniels 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 Porto Seguro with a short position of Archer Daniels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Porto Seguro and Archer Daniels.

Diversification Opportunities for Porto Seguro and Archer Daniels

0.62

Correlation Coefficient

Porto Seguro  Archer Daniels

Poor diversification

The 3 months correlation between Porto and Archer is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Porto Seguro SA and Archer Daniels Midland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Daniels Midland and Porto Seguro 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 Porto Seguro SA are associated (or correlated) with Archer Daniels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Daniels Midland has no effect on the direction of Porto Seguro i.e., Porto Seguro and Archer Daniels go up and down completely randomly.

Pair Corralation between Porto Seguro and Archer Daniels

Assuming the 90 days trading horizon Porto Seguro SA is expected to generate 0.9 times more return on investment than Archer Daniels. However, Porto Seguro SA is 1.12 times less risky than Archer Daniels. It trades about 0.24 of its potential returns per unit of risk. Archer Daniels Midland is currently generating about 0.08 per unit of risk. If you would invest  4,074  in Porto Seguro SA on April 21, 2025 and sell it today you would earn a total of  1,107  from holding Porto Seguro SA or generate 27.17% return on investment over 90 days.

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

Porto Seguro SA  vs.  Archer Daniels Midland

Porto Seguro SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Porto Seguro SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Porto Seguro unveiled solid returns over the last few months and may actually be approaching a breakup point.

Archer Daniels Midland

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Archer Daniels Midland are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Archer Daniels may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Porto Seguro and Archer Daniels

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

The idea behind Porto Seguro SA and Archer Daniels Midland 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.