Correlation Between Marcopolo and Lupatech
Can any of the company-specific risk be diversified away by investing in both Marcopolo and Lupatech 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 Lupatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marcopolo SA and Lupatech SA, you can compare the effects of market volatilities on Marcopolo and Lupatech 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 Lupatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcopolo and Lupatech.
Diversification Opportunities for Marcopolo and Lupatech
Excellent diversification
The 3 months correlation between Marcopolo and Lupatech is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Marcopolo SA and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech 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 Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of Marcopolo i.e., Marcopolo and Lupatech go up and down completely randomly.
Pair Corralation between Marcopolo and Lupatech
Assuming the 90 days trading horizon Marcopolo SA is expected to generate 0.73 times more return on investment than Lupatech. However, Marcopolo SA is 1.37 times less risky than Lupatech. It trades about 0.33 of its potential returns per unit of risk. Lupatech SA is currently generating about -0.02 per unit of risk. If you would invest 843.00 in Marcopolo SA on August 28, 2024 and sell it today you would earn a total of 116.00 from holding Marcopolo SA or generate 13.76% 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. Lupatech SA
Performance |
| Timeline |
| Marcopolo SA |
| Lupatech SA |
Marcopolo and Lupatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marcopolo and Lupatech
The main advantage of trading using opposite Marcopolo and Lupatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcopolo position performs unexpectedly, Lupatech 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 Lupatech will offset losses from the drop in Lupatech's long position.| Marcopolo vs. Fras le SA | Marcopolo vs. Indstrias Romi SA | Marcopolo vs. Clave Indices De | Marcopolo vs. BTG Pactual Logstica |
| Lupatech vs. PDG Realty SA | Lupatech vs. Positivo Tecnologia SA | Lupatech vs. Rossi Residencial SA | Lupatech vs. Eternit 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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