Correlation Between Marcopolo and Karsten SA
Can any of the company-specific risk be diversified away by investing in both Marcopolo and Karsten SA 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 Karsten SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marcopolo SA and Karsten SA, you can compare the effects of market volatilities on Marcopolo and Karsten SA 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 Karsten SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcopolo and Karsten SA.
Diversification Opportunities for Marcopolo and Karsten SA
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marcopolo and Karsten is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Marcopolo SA and Karsten SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karsten SA 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 Karsten SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karsten SA has no effect on the direction of Marcopolo i.e., Marcopolo and Karsten SA go up and down completely randomly.
Pair Corralation between Marcopolo and Karsten SA
Assuming the 90 days trading horizon Marcopolo SA is expected to under-perform the Karsten SA. But the preferred stock apears to be less risky and, when comparing its historical volatility, Marcopolo SA is 1.5 times less risky than Karsten SA. The preferred stock trades about -0.08 of its potential returns per unit of risk. The Karsten SA is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,900 in Karsten SA on September 13, 2024 and sell it today you would earn a total of 323.00 from holding Karsten SA or generate 17.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marcopolo SA vs. Karsten SA
Performance |
| Timeline |
| Marcopolo SA |
| Karsten SA |
Marcopolo and Karsten SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marcopolo and Karsten SA
The main advantage of trading using opposite Marcopolo and Karsten SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcopolo position performs unexpectedly, Karsten SA 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 Karsten SA will offset losses from the drop in Karsten SA's long position.| Marcopolo vs. Randon SA Implementos | Marcopolo vs. Metalurgica Gerdau SA | Marcopolo vs. CCR SA | Marcopolo vs. Iochpe Maxion SA |
| Karsten SA vs. Springs Global Participaes | Karsten SA vs. Marcopolo SA | Karsten SA vs. Inepar SA Indstria | Karsten SA vs. BTG Pactual Logstica |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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