Correlation Between Marcopolo and Whirlpool
Can any of the company-specific risk be diversified away by investing in both Marcopolo and Whirlpool 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 Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marcopolo SA and Whirlpool SA, you can compare the effects of market volatilities on Marcopolo and Whirlpool 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 Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcopolo and Whirlpool.
Diversification Opportunities for Marcopolo and Whirlpool
Significant diversification
The 3 months correlation between Marcopolo and Whirlpool is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Marcopolo SA and Whirlpool SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool 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 Whirlpool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whirlpool SA has no effect on the direction of Marcopolo i.e., Marcopolo and Whirlpool go up and down completely randomly.
Pair Corralation between Marcopolo and Whirlpool
Assuming the 90 days trading horizon Marcopolo SA is expected to under-perform the Whirlpool. In addition to that, Marcopolo is 2.3 times more volatile than Whirlpool SA. It trades about -0.16 of its total potential returns per unit of risk. Whirlpool SA is currently generating about 0.02 per unit of volatility. If you would invest 411.00 in Whirlpool SA on November 28, 2024 and sell it today you would earn a total of 1.00 from holding Whirlpool SA or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marcopolo SA vs. Whirlpool SA
Performance |
| Timeline |
| Marcopolo SA |
| Whirlpool SA |
Marcopolo and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marcopolo and Whirlpool
The main advantage of trading using opposite Marcopolo and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcopolo position performs unexpectedly, Whirlpool 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 Whirlpool will offset losses from the drop in Whirlpool's long position.| Marcopolo vs. Randon SA Implementos | Marcopolo vs. Metalurgica Gerdau SA | Marcopolo vs. CCR SA | Marcopolo vs. Iochpe Maxion SA |
| Whirlpool vs. Whirlpool SA | Whirlpool vs. Indstrias Romi SA | Whirlpool vs. Schulz SA | Whirlpool vs. Marcopolo 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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