Correlation Between Marcopolo and Grazziotin

Can any of the company-specific risk be diversified away by investing in both Marcopolo and Grazziotin 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 Grazziotin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marcopolo SA and Grazziotin SA, you can compare the effects of market volatilities on Marcopolo and Grazziotin 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 Grazziotin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcopolo and Grazziotin.

Diversification Opportunities for Marcopolo and Grazziotin

-0.64

Correlation Coefficient

Marcopolo  Grazziotin

Excellent diversification

The 3 months correlation between Marcopolo and Grazziotin is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Marcopolo SA and Grazziotin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grazziotin 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 Grazziotin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grazziotin SA has no effect on the direction of Marcopolo i.e., Marcopolo and Grazziotin go up and down completely randomly.

Pair Corralation between Marcopolo and Grazziotin

Assuming the 90 days trading horizon Marcopolo SA is expected to under-perform the Grazziotin. In addition to that, Marcopolo is 1.42 times more volatile than Grazziotin SA. It trades about -0.08 of its total potential returns per unit of risk. Grazziotin SA is currently generating about 0.17 per unit of volatility. If you would invest  2,373  in Grazziotin SA on October 15, 2024 and sell it today you would earn a total of  424.00  from holding Grazziotin SA or generate 17.87% 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.  Grazziotin SA

Marcopolo SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marcopolo SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Preferred Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Grazziotin SA

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grazziotin SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Grazziotin unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marcopolo and Grazziotin

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

The idea behind Marcopolo SA and Grazziotin 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.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..