Correlation Between Malibu Boats and EZGO Technologies
Can any of the company-specific risk be diversified away by investing in both Malibu Boats and EZGO Technologies 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 EZGO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malibu Boats and EZGO Technologies, you can compare the effects of market volatilities on Malibu Boats and EZGO Technologies 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 EZGO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malibu Boats and EZGO Technologies.
Diversification Opportunities for Malibu Boats and EZGO Technologies
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Malibu and EZGO is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Malibu Boats and EZGO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZGO Technologies 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 EZGO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZGO Technologies has no effect on the direction of Malibu Boats i.e., Malibu Boats and EZGO Technologies go up and down completely randomly.
Pair Corralation between Malibu Boats and EZGO Technologies
Given the investment horizon of 90 days Malibu Boats is expected to generate 0.71 times more return on investment than EZGO Technologies. However, Malibu Boats is 1.41 times less risky than EZGO Technologies. It trades about 0.07 of its potential returns per unit of risk. EZGO Technologies is currently generating about -0.14 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 124.00 from holding Malibu Boats or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malibu Boats vs. EZGO Technologies
Performance |
| Timeline |
| Malibu Boats |
| EZGO Technologies |
Malibu Boats and EZGO Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malibu Boats and EZGO Technologies
The main advantage of trading using opposite Malibu Boats and EZGO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malibu Boats position performs unexpectedly, EZGO Technologies 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 EZGO Technologies will offset losses from the drop in EZGO Technologies' long position.| Malibu Boats vs. MCBC Holdings | Malibu Boats vs. Winnebago Industries | Malibu Boats vs. LCI Industries | Malibu Boats vs. Thor Industries |
| EZGO Technologies vs. Vision Marine Technologies | EZGO Technologies vs. Marine Products | EZGO Technologies vs. Thor Industries | EZGO Technologies vs. BRP Inc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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