Correlation Between MarineMax and Big 5

Can any of the company-specific risk be diversified away by investing in both MarineMax and Big 5 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 MarineMax and Big 5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MarineMax and Big 5 Sporting, you can compare the effects of market volatilities on MarineMax and Big 5 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 MarineMax with a short position of Big 5. Check out your portfolio center. Please also check ongoing floating volatility patterns of MarineMax and Big 5.

Diversification Opportunities for MarineMax and Big 5

0.33

Correlation Coefficient

MarineMax  Big 5

Weak diversification

The 3 months correlation between MarineMax and Big is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding MarineMax and Big 5 Sporting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big 5 Sporting and MarineMax 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 MarineMax are associated (or correlated) with Big 5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big 5 Sporting has no effect on the direction of MarineMax i.e., MarineMax and Big 5 go up and down completely randomly.

Pair Corralation between MarineMax and Big 5

Considering the 90-day investment horizon MarineMax is expected to generate 0.88 times more return on investment than Big 5. However, MarineMax is 1.14 times less risky than Big 5. It trades about 0.05 of its potential returns per unit of risk. Big 5 Sporting is currently generating about 0.0 per unit of risk. If you would invest  3,155  in MarineMax on September 1, 2024 and sell it today you would earn a total of  277.00  from holding MarineMax or generate 8.78% return on investment over 90 days.

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

MarineMax  vs.  Big 5 Sporting

MarineMax

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MarineMax are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, MarineMax may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Big 5 Sporting

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Big 5 Sporting has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Big 5 is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with MarineMax and Big 5

The main advantage of trading using opposite MarineMax and Big 5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MarineMax position performs unexpectedly, Big 5 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 Big 5 will offset losses from the drop in Big 5's long position.

The idea behind MarineMax and Big 5 Sporting 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.