Correlation Between Marcopolo and Klabin SA

Can any of the company-specific risk be diversified away by investing in both Marcopolo and Klabin 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 Klabin 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 Klabin SA, you can compare the effects of market volatilities on Marcopolo and Klabin 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 Klabin SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcopolo and Klabin SA.

Diversification Opportunities for Marcopolo and Klabin SA

0.16

Correlation Coefficient

Marcopolo  Klabin SA

Average diversification

The 3 months correlation between Marcopolo and Klabin is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Marcopolo SA and Klabin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klabin 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 Klabin SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klabin SA has no effect on the direction of Marcopolo i.e., Marcopolo and Klabin SA go up and down completely randomly.

Pair Corralation between Marcopolo and Klabin SA

Assuming the 90 days trading horizon Marcopolo is expected to generate 2.34 times less return on investment than Klabin SA. In addition to that, Marcopolo is 1.48 times more volatile than Klabin SA. It trades about 0.03 of its total potential returns per unit of risk. Klabin SA is currently generating about 0.12 per unit of volatility. If you would invest  428.00  in Klabin SA on September 16, 2024 and sell it today you would earn a total of  49.00  from holding Klabin SA or generate 11.45% 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.  Klabin SA

Marcopolo SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marcopolo SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Marcopolo is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Klabin SA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Klabin SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Klabin SA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Marcopolo and Klabin SA

The main advantage of trading using opposite Marcopolo and Klabin SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcopolo position performs unexpectedly, Klabin 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 Klabin SA will offset losses from the drop in Klabin SA's long position.

The idea behind Marcopolo SA and Klabin SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.