Correlation Between Malibu Boats and BRP
Can any of the company-specific risk be diversified away by investing in both Malibu Boats and BRP 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 BRP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malibu Boats and BRP Inc, you can compare the effects of market volatilities on Malibu Boats and BRP 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 BRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malibu Boats and BRP.
Diversification Opportunities for Malibu Boats and BRP
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Malibu and BRP is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Malibu Boats and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc 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 BRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRP Inc has no effect on the direction of Malibu Boats i.e., Malibu Boats and BRP go up and down completely randomly.
Pair Corralation between Malibu Boats and BRP
Given the investment horizon of 90 days Malibu Boats is expected to generate 1.09 times more return on investment than BRP. However, Malibu Boats is 1.09 times more volatile than BRP Inc. It trades about 0.16 of its potential returns per unit of risk. BRP Inc is currently generating about 0.03 per unit of risk. If you would invest 3,638 in Malibu Boats on November 2, 2024 and sell it today you would earn a total of 250.00 from holding Malibu Boats or generate 6.87% 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. BRP Inc
Performance |
| Timeline |
| Malibu Boats |
| BRP Inc |
Malibu Boats and BRP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malibu Boats and BRP
The main advantage of trading using opposite Malibu Boats and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malibu Boats position performs unexpectedly, BRP 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 BRP will offset losses from the drop in BRP's long position.| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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