Correlation Between Dicks Sporting and MarineMax
Can any of the company-specific risk be diversified away by investing in both Dicks Sporting 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 Dicks Sporting and MarineMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicks Sporting Goods and MarineMax, you can compare the effects of market volatilities on Dicks Sporting 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 Dicks Sporting with a short position of MarineMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicks Sporting and MarineMax.
Diversification Opportunities for Dicks Sporting and MarineMax
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dicks and MarineMax is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods and MarineMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarineMax and Dicks Sporting 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 Dicks Sporting Goods 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 Dicks Sporting i.e., Dicks Sporting and MarineMax go up and down completely randomly.
Pair Corralation between Dicks Sporting and MarineMax
Considering the 90-day investment horizon Dicks Sporting is expected to generate 1.84 times less return on investment than MarineMax. But when comparing it to its historical volatility, Dicks Sporting Goods is 2.02 times less risky than MarineMax. It trades about 0.13 of its potential returns per unit of risk. MarineMax is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,085 in MarineMax on August 27, 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 |
Dicks Sporting Goods vs. MarineMax
Performance |
| Timeline |
| Dicks Sporting Goods |
| MarineMax |
Dicks Sporting and MarineMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicks Sporting and MarineMax
The main advantage of trading using opposite Dicks Sporting and MarineMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicks Sporting 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.| Dicks Sporting vs. RH | Dicks Sporting vs. AutoZone | Dicks Sporting vs. Best Buy Co | Dicks Sporting vs. Ulta Beauty |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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