Correlation Between Card Factory and MarineMax
Can any of the company-specific risk be diversified away by investing in both Card Factory 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 Card Factory and MarineMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Card Factory plc and MarineMax, you can compare the effects of market volatilities on Card Factory 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 Card Factory with a short position of MarineMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Card Factory and MarineMax.
Diversification Opportunities for Card Factory and MarineMax
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Card and MarineMax is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Card Factory plc and MarineMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarineMax and Card Factory 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 Card Factory plc 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 Card Factory i.e., Card Factory and MarineMax go up and down completely randomly.
Pair Corralation between Card Factory and MarineMax
Assuming the 90 days horizon Card Factory plc is expected to under-perform the MarineMax. In addition to that, Card Factory is 1.27 times more volatile than MarineMax. It trades about -0.2 of its total potential returns per unit of risk. MarineMax is currently generating about 0.11 per unit of volatility. If you would invest 3,085 in MarineMax on August 28, 2024 and sell it today you would earn a total of 254.00 from holding MarineMax or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Card Factory plc vs. MarineMax
Performance |
| Timeline |
| Card Factory plc |
| MarineMax |
Card Factory and MarineMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Card Factory and MarineMax
The main advantage of trading using opposite Card Factory and MarineMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Card Factory 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.| Card Factory vs. Dixons Carphone plc | Card Factory vs. Ceconomy AG ADR | Card Factory vs. Tandy Leather Factory | Card Factory vs. Green River Gold |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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