Correlation Between Marine Products and Cars
Can any of the company-specific risk be diversified away by investing in both Marine Products and Cars 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 Marine Products and Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Products and Cars Inc, you can compare the effects of market volatilities on Marine Products and Cars 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 Marine Products with a short position of Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Cars.
Diversification Opportunities for Marine Products and Cars
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Marine and Cars is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc and Marine Products 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 Marine Products are associated (or correlated) with Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Marine Products i.e., Marine Products and Cars go up and down completely randomly.
Pair Corralation between Marine Products and Cars
Considering the 90-day investment horizon Marine Products is expected to generate 0.54 times more return on investment than Cars. However, Marine Products is 1.86 times less risky than Cars. It trades about -0.04 of its potential returns per unit of risk. Cars Inc is currently generating about -0.13 per unit of risk. If you would invest 894.00 in Marine Products on December 27, 2024 and sell it today you would lose (52.00) from holding Marine Products or give up 5.82% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Marine Products vs. Cars Inc
Performance |
Timeline |
Marine Products |
Cars Inc |
Marine Products and Cars Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Marine Products and Cars
The main advantage of trading using opposite Marine Products and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.Marine Products vs. Thor Industries | Marine Products vs. BRP Inc | Marine Products vs. Brunswick | Marine Products vs. EZGO Technologies |
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 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.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data |