Correlation Between Ceconomy and MarineMax

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

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

Diversification Opportunities for Ceconomy and MarineMax

0.18

Correlation Coefficient

Ceconomy  MarineMax

Average diversification

The 3 months correlation between Ceconomy and MarineMax is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ceconomy AG ADR and MarineMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarineMax and Ceconomy 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 Ceconomy AG ADR 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 Ceconomy i.e., Ceconomy and MarineMax go up and down completely randomly.

Pair Corralation between Ceconomy and MarineMax

Assuming the 90 days horizon Ceconomy AG ADR is expected to under-perform the MarineMax. In addition to that, Ceconomy is 2.24 times more volatile than MarineMax. It trades about -0.14 of its total potential returns per unit of risk. MarineMax is currently generating about -0.22 per unit of volatility. If you would invest  3,215  in MarineMax on October 5, 2024 and sell it today you would lose (414.00) from holding MarineMax or give up 12.88% of portfolio value over 90 days.

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

Ceconomy AG ADR  vs.  MarineMax

Ceconomy AG ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ceconomy AG ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

Pair Trading with Ceconomy and MarineMax

The main advantage of trading using opposite Ceconomy and MarineMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceconomy 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 Ceconomy AG ADR 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.