Correlation Between Leslies and MarineMax

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

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

Diversification Opportunities for Leslies and MarineMax

0.82

Correlation Coefficient

Leslies  MarineMax

Very poor diversification

The 3 months correlation between Leslies and MarineMax is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Leslies and MarineMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarineMax and Leslies 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 Leslies are associated (or correlated) with MarineMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MarineMax has no effect on the direction of Leslies i.e., Leslies and MarineMax go up and down completely randomly.

Pair Corralation between Leslies and MarineMax

Given the investment horizon of 90 days Leslies is expected to under-perform the MarineMax. In addition to that, Leslies is 1.68 times more volatile than MarineMax. It trades about -0.24 of its total potential returns per unit of risk. MarineMax is currently generating about -0.09 per unit of volatility. If you would invest  2,729  in MarineMax on December 30, 2024 and sell it today you would lose (528.00) from holding MarineMax or give up 19.35% of portfolio value over 90 days.

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

Leslies  vs.  MarineMax

Leslies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Leslies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

MarineMax

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Leslies and MarineMax

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

The idea behind Leslies and MarineMax 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.