Correlation Between Dogness International and Malibu Boats
Can any of the company-specific risk be diversified away by investing in both Dogness International 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 Dogness International and Malibu Boats into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dogness International Corp and Malibu Boats, you can compare the effects of market volatilities on Dogness International 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 Dogness International with a short position of Malibu Boats. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dogness International and Malibu Boats.
Diversification Opportunities for Dogness International and Malibu Boats
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dogness and Malibu is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dogness International Corp and Malibu Boats in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malibu Boats and Dogness International 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 Dogness International Corp 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 Dogness International i.e., Dogness International and Malibu Boats go up and down completely randomly.
Pair Corralation between Dogness International and Malibu Boats
Given the investment horizon of 90 days Dogness International Corp is expected to generate 3.01 times more return on investment than Malibu Boats. However, Dogness International is 3.01 times more volatile than Malibu Boats. It trades about 0.03 of its potential returns per unit of risk. Malibu Boats is currently generating about -0.01 per unit of risk. If you would invest 4,800 in Dogness International Corp on September 18, 2024 and sell it today you would lose (74.00) from holding Dogness International Corp or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dogness International Corp vs. Malibu Boats
Performance |
| Timeline |
| Dogness International |
| Malibu Boats |
Dogness International and Malibu Boats Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dogness International and Malibu Boats
The main advantage of trading using opposite Dogness International and Malibu Boats positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dogness International 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.| Dogness International vs. Digital Brands Group | Dogness International vs. Data Storage | Dogness International vs. Auddia Inc | Dogness International vs. DatChat Series A |
| Malibu Boats vs. Polaris Industries | Malibu Boats vs. MCBC Holdings | Malibu Boats vs. LCI Industries | Malibu Boats vs. Thor Industries |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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