Correlation Between Fidelity National and Marcopolo
Can any of the company-specific risk be diversified away by investing in both Fidelity National 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 Fidelity National and Marcopolo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity National Information and Marcopolo SA, you can compare the effects of market volatilities on Fidelity National 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 Fidelity National with a short position of Marcopolo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Marcopolo.
Diversification Opportunities for Fidelity National and Marcopolo
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Marcopolo is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Marcopolo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcopolo SA and Fidelity National 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 Fidelity National Information 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 Fidelity National i.e., Fidelity National and Marcopolo go up and down completely randomly.
Pair Corralation between Fidelity National and Marcopolo
Assuming the 90 days trading horizon Fidelity National Information is expected to under-perform the Marcopolo. But the stock apears to be less risky and, when comparing its historical volatility, Fidelity National Information is 2.2 times less risky than Marcopolo. The stock trades about -0.32 of its potential returns per unit of risk. The Marcopolo SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 843.00 in Marcopolo SA on August 30, 2024 and sell it today you would earn a total of 87.00 from holding Marcopolo SA or generate 10.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. Marcopolo SA
Performance |
| Timeline |
| Fidelity National |
| Marcopolo SA |
Fidelity National and Marcopolo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Marcopolo
The main advantage of trading using opposite Fidelity National and Marcopolo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National 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.| Fidelity National vs. United Rentals | Fidelity National vs. GP Investments | Fidelity National vs. HDFC Bank Limited | Fidelity National vs. Bread Financial Holdings |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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