Correlation Between Marine Products and Cars
Can any of the company-specific risk be diversified away by investing in both Marine Products and Cars 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 Marine Products and Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Products and Cars Inc, you can compare the effects of market volatilities on Marine Products and Cars 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 Marine Products with a short position of Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Cars.
Diversification Opportunities for Marine Products and Cars
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marine and Cars is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc and Marine Products 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 Marine Products are associated (or correlated) with Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Marine Products i.e., Marine Products and Cars go up and down completely randomly.
Pair Corralation between Marine Products and Cars
Considering the 90-day investment horizon Marine Products is expected to generate 1.2 times more return on investment than Cars. However, Marine Products is 1.2 times more volatile than Cars Inc. It trades about 0.02 of its potential returns per unit of risk. Cars Inc is currently generating about 0.02 per unit of risk. If you would invest 935.00 in Marine Products on September 2, 2024 and sell it today you would earn a total of 54.00 from holding Marine Products or generate 5.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marine Products vs. Cars Inc
Performance |
| Timeline |
| Marine Products |
| Cars Inc |
Marine Products and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Products and Cars
The main advantage of trading using opposite Marine Products and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.| Marine Products vs. LCI Industries | Marine Products vs. MCBC Holdings | Marine Products vs. Winnebago Industries | Marine Products 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |