Correlation Between ODP Corp and MarineMax
Can any of the company-specific risk be diversified away by investing in both ODP Corp and MarineMax 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 ODP Corp and MarineMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ODP Corp and MarineMax, you can compare the effects of market volatilities on ODP Corp and MarineMax 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 ODP Corp with a short position of MarineMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of ODP Corp and MarineMax.
Diversification Opportunities for ODP Corp and MarineMax
Weak diversification
The 3 months correlation between ODP and MarineMax is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ODP Corp and MarineMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarineMax and ODP Corp 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 ODP Corp are associated (or correlated) with MarineMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MarineMax has no effect on the direction of ODP Corp i.e., ODP Corp and MarineMax go up and down completely randomly.
Pair Corralation between ODP Corp and MarineMax
Considering the 90-day investment horizon ODP Corp is expected to under-perform the MarineMax. But the stock apears to be less risky and, when comparing its historical volatility, ODP Corp is 1.29 times less risky than MarineMax. The stock trades about -0.08 of its potential returns per unit of risk. The MarineMax is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,361 in MarineMax on October 31, 2024 and sell it today you would lose (460.00) from holding MarineMax or give up 13.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ODP Corp vs. MarineMax
Performance |
| Timeline |
| ODP Corp |
| MarineMax |
ODP Corp and MarineMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ODP Corp and MarineMax
The main advantage of trading using opposite ODP Corp and MarineMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ODP Corp position performs unexpectedly, MarineMax 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 MarineMax will offset losses from the drop in MarineMax's long position.| ODP Corp vs. Leslies | ODP Corp vs. Sally Beauty Holdings | ODP Corp vs. 1 800 FLOWERSCOM | ODP Corp vs. Caseys General Stores |
| MarineMax vs. National Vision Holdings | MarineMax vs. Sally Beauty Holdings | MarineMax vs. Sportsmans | MarineMax vs. 1 800 FLOWERSCOM |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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