Correlation Between Malibu Boats and Curtiss Motorcycles
Can any of the company-specific risk be diversified away by investing in both Malibu Boats and Curtiss Motorcycles 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 Malibu Boats and Curtiss Motorcycles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malibu Boats and Curtiss Motorcycles, you can compare the effects of market volatilities on Malibu Boats and Curtiss Motorcycles 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 Malibu Boats with a short position of Curtiss Motorcycles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malibu Boats and Curtiss Motorcycles.
Diversification Opportunities for Malibu Boats and Curtiss Motorcycles
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Malibu and Curtiss is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Malibu Boats and Curtiss Motorcycles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Motorcycles and Malibu Boats 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 Malibu Boats are associated (or correlated) with Curtiss Motorcycles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curtiss Motorcycles has no effect on the direction of Malibu Boats i.e., Malibu Boats and Curtiss Motorcycles go up and down completely randomly.
Pair Corralation between Malibu Boats and Curtiss Motorcycles
Given the investment horizon of 90 days Malibu Boats is expected to generate 0.17 times more return on investment than Curtiss Motorcycles. However, Malibu Boats is 5.77 times less risky than Curtiss Motorcycles. It trades about 0.14 of its potential returns per unit of risk. Curtiss Motorcycles is currently generating about -0.07 per unit of risk. If you would invest 4,191 in Malibu Boats on August 27, 2024 and sell it today you would earn a total of 331.00 from holding Malibu Boats or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malibu Boats vs. Curtiss Motorcycles
Performance |
| Timeline |
| Malibu Boats |
| Curtiss Motorcycles |
Malibu Boats and Curtiss Motorcycles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malibu Boats and Curtiss Motorcycles
The main advantage of trading using opposite Malibu Boats and Curtiss Motorcycles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malibu Boats position performs unexpectedly, Curtiss Motorcycles 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 Curtiss Motorcycles will offset losses from the drop in Curtiss Motorcycles' long position.| Malibu Boats vs. Polaris Industries | Malibu Boats vs. MCBC Holdings | Malibu Boats vs. LCI Industries | Malibu Boats vs. Thor Industries |
| Curtiss Motorcycles vs. Life Electric Vehicles | Curtiss Motorcycles vs. Evil Empire Designs | Curtiss Motorcycles vs. Twin Vee Powercats | Curtiss Motorcycles vs. LCI 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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