Correlation Between JHSF Participaes and Marcopolo

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

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

Diversification Opportunities for JHSF Participaes and Marcopolo

0.7

Correlation Coefficient

JHSF Participaes  Marcopolo

Poor diversification

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

Pair Corralation between JHSF Participaes and Marcopolo

Assuming the 90 days trading horizon JHSF Participaes is expected to generate 2.21 times less return on investment than Marcopolo. In addition to that, JHSF Participaes is 1.19 times more volatile than Marcopolo SA. It trades about 0.07 of its total potential returns per unit of risk. Marcopolo SA is currently generating about 0.2 per unit of volatility. If you would invest  662.00  in Marcopolo SA on April 23, 2025 and sell it today you would earn a total of  167.00  from holding Marcopolo SA or generate 25.23% return on investment over 90 days.

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

JHSF Participaes SA  vs.  Marcopolo SA

JHSF Participaes

Risk-Adjusted Performance

Modest

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

Marcopolo SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marcopolo SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Marcopolo unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JHSF Participaes and Marcopolo

The main advantage of trading using opposite JHSF Participaes and Marcopolo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JHSF Participaes 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 JHSF Participaes 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.