Correlation Between Winmark and MarineMax

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

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

Diversification Opportunities for Winmark and MarineMax

0.12

Correlation Coefficient

Winmark  MarineMax

Average diversification

The 3 months correlation between Winmark and MarineMax is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Winmark and MarineMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarineMax and Winmark 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 Winmark 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 Winmark i.e., Winmark and MarineMax go up and down completely randomly.

Pair Corralation between Winmark and MarineMax

Given the investment horizon of 90 days Winmark is expected to generate 0.39 times more return on investment than MarineMax. However, Winmark is 2.57 times less risky than MarineMax. It trades about -0.32 of its potential returns per unit of risk. MarineMax is currently generating about -0.28 per unit of risk. If you would invest  41,229  in Winmark on October 9, 2024 and sell it today you would lose (2,644) from holding Winmark or give up 6.41% of portfolio value over 90 days.

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

Winmark  vs.  MarineMax

Winmark

Risk-Adjusted Performance

6 of 100

Modest

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

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 Winmark and MarineMax

The main advantage of trading using opposite Winmark and MarineMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winmark 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 Winmark 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 Commodity Directory module to find actively traded commodities issued by global exchanges.