Correlation Between Schulz SA and Marcopolo

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

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

Diversification Opportunities for Schulz SA and Marcopolo

-0.7

Correlation Coefficient

Schulz SA  Marcopolo

Excellent diversification

The 3 months correlation between Schulz and Marcopolo is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Schulz SA and Marcopolo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcopolo SA and Schulz SA 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 Schulz 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 Schulz SA i.e., Schulz SA and Marcopolo go up and down completely randomly.

Pair Corralation between Schulz SA and Marcopolo

Assuming the 90 days trading horizon Schulz SA is expected to under-perform the Marcopolo. But the preferred stock apears to be less risky and, when comparing its historical volatility, Schulz SA is 1.63 times less risky than Marcopolo. The preferred stock trades about -0.14 of its potential returns per unit of risk. The Marcopolo SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  786.00  in Marcopolo SA on September 14, 2024 and sell it today you would earn a total of  64.00  from holding Marcopolo SA or generate 8.14% return on investment over 90 days.

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

Schulz SA  vs.  Marcopolo SA

Schulz SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schulz 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Marcopolo SA

Risk-Adjusted Performance

5 of 100

OK

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 Schulz SA and Marcopolo

The main advantage of trading using opposite Schulz SA and Marcopolo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schulz SA 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 Schulz SA 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.