Correlation Between Vista Outdoor and Malibu Boats

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

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

Diversification Opportunities for Vista Outdoor and Malibu Boats

0.0

Correlation Coefficient

Vista Outdoor  Malibu Boats

Pay attention - limited upside

The 3 months correlation between Vista and Malibu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vista Outdoor and Malibu Boats in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malibu Boats and Vista Outdoor 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 Vista Outdoor are associated (or correlated) with Malibu Boats. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malibu Boats has no effect on the direction of Vista Outdoor i.e., Vista Outdoor and Malibu Boats go up and down completely randomly.

Pair Corralation between Vista Outdoor and Malibu Boats

If you would invest (100.00) in Vista Outdoor on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Vista Outdoor or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Vista Outdoor  vs.  Malibu Boats

Vista Outdoor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vista Outdoor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Vista Outdoor is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Malibu Boats

Risk-Adjusted Performance

Very Weak

Over the last 90 days Malibu Boats has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Vista Outdoor and Malibu Boats

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

The idea behind Vista Outdoor and Malibu Boats 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.