Correlation Between Energisa and Marcopolo
Can any of the company-specific risk be diversified away by investing in both Energisa and Marcopolo 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 Energisa and Marcopolo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Marcopolo SA, you can compare the effects of market volatilities on Energisa and Marcopolo 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 Energisa with a short position of Marcopolo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Marcopolo.
Diversification Opportunities for Energisa and Marcopolo
Modest diversification
The 3 months correlation between Energisa and Marcopolo is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Marcopolo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcopolo SA and Energisa 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 Energisa SA are associated (or correlated) with Marcopolo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcopolo SA has no effect on the direction of Energisa i.e., Energisa and Marcopolo go up and down completely randomly.
Pair Corralation between Energisa and Marcopolo
Assuming the 90 days trading horizon Energisa SA is expected to generate 0.99 times more return on investment than Marcopolo. However, Energisa SA is 1.01 times less risky than Marcopolo. It trades about -0.09 of its potential returns per unit of risk. Marcopolo SA is currently generating about -0.32 per unit of risk. If you would invest 3,846 in Energisa SA on October 9, 2024 and sell it today you would lose (152.00) from holding Energisa SA or give up 3.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energisa SA vs. Marcopolo SA
Performance |
| Timeline |
| Energisa SA |
| Marcopolo SA |
Energisa and Marcopolo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Marcopolo
The main advantage of trading using opposite Energisa and Marcopolo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Marcopolo 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 Marcopolo will offset losses from the drop in Marcopolo's long position.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| Marcopolo vs. Randon SA Implementos | Marcopolo vs. Metalurgica Gerdau SA | Marcopolo vs. CCR SA | Marcopolo vs. Iochpe Maxion SA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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