Correlation Between Whirlpool and Marcopolo
Can any of the company-specific risk be diversified away by investing in both Whirlpool 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 Whirlpool and Marcopolo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool SA and Marcopolo SA, you can compare the effects of market volatilities on Whirlpool 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 Whirlpool with a short position of Marcopolo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and Marcopolo.
Diversification Opportunities for Whirlpool and Marcopolo
Very good diversification
The 3 months correlation between Whirlpool and Marcopolo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool SA and Marcopolo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcopolo SA and Whirlpool 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 Whirlpool SA 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 Whirlpool i.e., Whirlpool and Marcopolo go up and down completely randomly.
Pair Corralation between Whirlpool and Marcopolo
Assuming the 90 days trading horizon Whirlpool is expected to generate 6.57 times less return on investment than Marcopolo. But when comparing it to its historical volatility, Whirlpool SA is 1.21 times less risky than Marcopolo. It trades about 0.01 of its potential returns per unit of risk. Marcopolo SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 288.00 in Marcopolo SA on January 24, 2025 and sell it today you would earn a total of 384.00 from holding Marcopolo SA or generate 133.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.14% |
| Values | Daily Returns |
Whirlpool SA vs. Marcopolo SA
Performance |
| Timeline |
| Whirlpool SA |
| Marcopolo SA |
Whirlpool and Marcopolo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and Marcopolo
The main advantage of trading using opposite Whirlpool and Marcopolo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool 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.| Whirlpool vs. Fortune Brands Innovations, | Whirlpool vs. Energisa SA | Whirlpool vs. Humana Inc | Whirlpool vs. BTG Pactual Logstica |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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