Correlation Between BB Renda and Marcopolo

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

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

Diversification Opportunities for BB Renda and Marcopolo

-0.76

Correlation Coefficient

BB Renda  Marcopolo

Pay attention - limited upside

The 3 months correlation between RNDP11 and Marcopolo is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding BB Renda de and Marcopolo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcopolo SA and BB Renda 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 BB Renda de 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 BB Renda i.e., BB Renda and Marcopolo go up and down completely randomly.

Pair Corralation between BB Renda and Marcopolo

Assuming the 90 days trading horizon BB Renda de is expected to under-perform the Marcopolo. In addition to that, BB Renda is 1.53 times more volatile than Marcopolo SA. It trades about -0.15 of its total potential returns per unit of risk. Marcopolo SA is currently generating about 0.08 per unit of volatility. If you would invest  586.00  in Marcopolo SA on September 2, 2024 and sell it today you would earn a total of  52.00  from holding Marcopolo SA or generate 8.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BB Renda de  vs.  Marcopolo SA

BB Renda de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BB Renda de has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Marcopolo SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marcopolo SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Marcopolo may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with BB Renda and Marcopolo

The main advantage of trading using opposite BB Renda and Marcopolo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Renda 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.

The idea behind BB Renda de and Marcopolo 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.