Correlation Between Marcopolo and BRB Banco
Can any of the company-specific risk be diversified away by investing in both Marcopolo and BRB Banco 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 Marcopolo and BRB Banco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marcopolo SA and BRB Banco, you can compare the effects of market volatilities on Marcopolo and BRB Banco 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 Marcopolo with a short position of BRB Banco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcopolo and BRB Banco.
Diversification Opportunities for Marcopolo and BRB Banco
Pay attention - limited upside
The 3 months correlation between Marcopolo and BRB is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Marcopolo SA and BRB Banco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRB Banco and Marcopolo 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 Marcopolo SA are associated (or correlated) with BRB Banco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRB Banco has no effect on the direction of Marcopolo i.e., Marcopolo and BRB Banco go up and down completely randomly.
Pair Corralation between Marcopolo and BRB Banco
Assuming the 90 days trading horizon Marcopolo SA is expected to generate 0.85 times more return on investment than BRB Banco. However, Marcopolo SA is 1.18 times less risky than BRB Banco. It trades about 0.12 of its potential returns per unit of risk. BRB Banco is currently generating about -0.05 per unit of risk. If you would invest 598.00 in Marcopolo SA on September 3, 2024 and sell it today you would earn a total of 261.00 from holding Marcopolo SA or generate 43.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marcopolo SA vs. BRB Banco
Performance |
| Timeline |
| Marcopolo SA |
| BRB Banco |
Marcopolo and BRB Banco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marcopolo and BRB Banco
The main advantage of trading using opposite Marcopolo and BRB Banco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcopolo position performs unexpectedly, BRB Banco 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 BRB Banco will offset losses from the drop in BRB Banco's long position.| Marcopolo vs. Randon SA Implementos | Marcopolo vs. Metalurgica Gerdau SA | Marcopolo vs. CCR SA | Marcopolo vs. Iochpe Maxion SA |
| BRB Banco vs. BRB Banco de | BRB Banco vs. Banco do Nordeste | BRB Banco vs. Banco do Estado | BRB Banco vs. Banco Mercantil do |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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