Correlation Between Six Flags and Malibu Boats
Can any of the company-specific risk be diversified away by investing in both Six Flags 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 Six Flags and Malibu Boats into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Six Flags Entertainment and Malibu Boats, you can compare the effects of market volatilities on Six Flags 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 Six Flags with a short position of Malibu Boats. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Flags and Malibu Boats.
Diversification Opportunities for Six Flags and Malibu Boats
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Six and Malibu is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and Malibu Boats in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malibu Boats and Six Flags 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 Six Flags Entertainment 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 Six Flags i.e., Six Flags and Malibu Boats go up and down completely randomly.
Pair Corralation between Six Flags and Malibu Boats
Considering the 90-day investment horizon Six Flags Entertainment is expected to generate 0.72 times more return on investment than Malibu Boats. However, Six Flags Entertainment is 1.39 times less risky 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 3,848 in Six Flags Entertainment on September 24, 2024 and sell it today you would earn a total of 1,016 from holding Six Flags Entertainment or generate 26.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Six Flags Entertainment vs. Malibu Boats
Performance |
| Timeline |
| Six Flags Entertainment |
| Malibu Boats |
Six Flags and Malibu Boats Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Six Flags and Malibu Boats
The main advantage of trading using opposite Six Flags and Malibu Boats positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Flags 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.| Six Flags vs. Planet Fitness | Six Flags vs. Madison Square Garden | Six Flags vs. Mattel Inc | Six Flags vs. Johnson Outdoors |
| Malibu Boats vs. Amer Sports, | Malibu Boats vs. Ralph Lauren Corp | Malibu Boats vs. Under Armour C | Malibu Boats vs. Dogness International Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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