Correlation Between MarineMax and AutoZone

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

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

Diversification Opportunities for MarineMax and AutoZone

-0.01

Correlation Coefficient

MarineMax  AutoZone

Good diversification

The 3 months correlation between MarineMax and AutoZone is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding MarineMax and AutoZone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoZone 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 AutoZone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoZone has no effect on the direction of MarineMax i.e., MarineMax and AutoZone go up and down completely randomly.

Pair Corralation between MarineMax and AutoZone

Considering the 90-day investment horizon MarineMax is expected to generate 11.24 times less return on investment than AutoZone. In addition to that, MarineMax is 3.08 times more volatile than AutoZone. It trades about 0.0 of its total potential returns per unit of risk. AutoZone is currently generating about 0.1 per unit of volatility. If you would invest  281,706  in AutoZone on October 7, 2024 and sell it today you would earn a total of  45,172  from holding AutoZone or generate 16.04% return on investment over 90 days.

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

MarineMax  vs.  AutoZone

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 very healthy basic indicators, MarineMax is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

AutoZone

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AutoZone are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, AutoZone may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with MarineMax and AutoZone

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

The idea behind MarineMax and AutoZone 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.