Correlation Between Marcopolo and Teka Tecelagem

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

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

Diversification Opportunities for Marcopolo and Teka Tecelagem

0.0

Correlation Coefficient

Marcopolo  Teka Tecelagem

Pay attention - limited upside

The 3 months correlation between Marcopolo and Teka is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marcopolo SA and Teka Tecelagem Kuehnrich in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teka Tecelagem Kuehnrich 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 Teka Tecelagem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teka Tecelagem Kuehnrich has no effect on the direction of Marcopolo i.e., Marcopolo and Teka Tecelagem go up and down completely randomly.

Pair Corralation between Marcopolo and Teka Tecelagem

Assuming the 90 days trading horizon Marcopolo SA is expected to generate 1.01 times more return on investment than Teka Tecelagem. However, Marcopolo is 1.01 times more volatile than Teka Tecelagem Kuehnrich. It trades about 0.08 of its potential returns per unit of risk. Teka Tecelagem Kuehnrich is currently generating about -0.01 per unit of risk. If you would invest  592.00  in Marcopolo SA on September 27, 2024 and sell it today you would earn a total of  137.00  from holding Marcopolo SA or generate 23.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Marcopolo SA  vs.  Teka Tecelagem Kuehnrich

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 latest uncertain performance, the Preferred Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Teka Tecelagem Kuehnrich

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Teka Tecelagem Kuehnrich are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Teka Tecelagem is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Marcopolo and Teka Tecelagem

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

The idea behind Marcopolo SA and Teka Tecelagem Kuehnrich 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.