Correlation Between Six Flags and Marine Products
Can any of the company-specific risk be diversified away by investing in both Six Flags and Marine Products 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 Marine Products 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 Marine Products, you can compare the effects of market volatilities on Six Flags and Marine Products 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 Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Flags and Marine Products.
Diversification Opportunities for Six Flags and Marine Products
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Six and Marine is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products 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 Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of Six Flags i.e., Six Flags and Marine Products go up and down completely randomly.
Pair Corralation between Six Flags and Marine Products
Considering the 90-day investment horizon Six Flags Entertainment is expected to generate 0.76 times more return on investment than Marine Products. However, Six Flags Entertainment is 1.31 times less risky than Marine Products. It trades about 0.03 of its potential returns per unit of risk. Marine Products is currently generating about -0.02 per unit of risk. If you would invest 4,139 in Six Flags Entertainment on September 19, 2024 and sell it today you would earn a total of 612.00 from holding Six Flags Entertainment or generate 14.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Six Flags Entertainment vs. Marine Products
Performance |
| Timeline |
| Six Flags Entertainment |
| Marine Products |
Six Flags and Marine Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Six Flags and Marine Products
The main advantage of trading using opposite Six Flags and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Flags position performs unexpectedly, Marine Products 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 Marine Products will offset losses from the drop in Marine Products' long position.| Six Flags vs. Planet Fitness | Six Flags vs. Madison Square Garden | Six Flags vs. Mattel Inc | Six Flags vs. Johnson Outdoors |
| Marine Products vs. Clarus Corp | Marine Products vs. OneSpaWorld Holdings | Marine Products vs. Leatt Corp | Marine Products vs. Six Flags Entertainment |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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