Correlation Between MarineMax and High Tide

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

By analyzing existing cross correlation between MarineMax and High Tide, you can compare the effects of market volatilities on MarineMax and High Tide 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 High Tide. Check out your portfolio center. Please also check ongoing floating volatility patterns of MarineMax and High Tide.

Diversification Opportunities for MarineMax and High Tide

-0.43

Correlation Coefficient

MarineMax  High Tide

Very good diversification

The 3 months correlation between MarineMax and High is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding MarineMax and High Tide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Tide 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 High Tide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Tide has no effect on the direction of MarineMax i.e., MarineMax and High Tide go up and down completely randomly.

Pair Corralation between MarineMax and High Tide

Considering the 90-day investment horizon MarineMax is expected to under-perform the High Tide. But the stock apears to be less risky and, when comparing its historical volatility, MarineMax is 1.15 times less risky than High Tide. The stock trades about -0.04 of its potential returns per unit of risk. The High Tide is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  214.00  in High Tide on September 19, 2024 and sell it today you would earn a total of  89.00  from holding High Tide or generate 41.59% return on investment over 90 days.

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

MarineMax  vs.  High Tide

MarineMax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MarineMax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

High Tide

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in High Tide are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, High Tide demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MarineMax and High Tide

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

The idea behind MarineMax and High Tide 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.

Check out your portfolio center.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.