Correlation Between AutoNation and MarineMax
Can any of the company-specific risk be diversified away by investing in both AutoNation 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 AutoNation and MarineMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AutoNation and MarineMax, you can compare the effects of market volatilities on AutoNation 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 AutoNation with a short position of MarineMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoNation and MarineMax.
Diversification Opportunities for AutoNation and MarineMax
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AutoNation and MarineMax is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding AutoNation and MarineMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarineMax and AutoNation 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 AutoNation 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 AutoNation i.e., AutoNation and MarineMax go up and down completely randomly.
Pair Corralation between AutoNation and MarineMax
Allowing for the 90-day total investment horizon AutoNation is expected to generate 0.66 times more return on investment than MarineMax. However, AutoNation is 1.51 times less risky than MarineMax. It trades about 0.05 of its potential returns per unit of risk. MarineMax is currently generating about 0.02 per unit of risk. If you would invest 11,935 in AutoNation on August 28, 2024 and sell it today you would earn a total of 6,023 from holding AutoNation or generate 50.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AutoNation vs. MarineMax
Performance |
| Timeline |
| AutoNation |
| MarineMax |
AutoNation and MarineMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AutoNation and MarineMax
The main advantage of trading using opposite AutoNation and MarineMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoNation 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.| AutoNation vs. Kingsway Financial Services | AutoNation vs. KAR Auction Services | AutoNation vs. Cango Inc | AutoNation vs. Vroom Inc |
| MarineMax vs. National Vision Holdings | MarineMax vs. Sally Beauty Holdings | MarineMax vs. Sportsmans | MarineMax vs. 1 800 FLOWERSCOM |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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