Correlation Between Marine Products and MCBC Holdings
Can any of the company-specific risk be diversified away by investing in both Marine Products and MCBC Holdings 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 MCBC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Products and MCBC Holdings, you can compare the effects of market volatilities on Marine Products and MCBC Holdings 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 MCBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and MCBC Holdings.
Diversification Opportunities for Marine Products and MCBC Holdings
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Marine and MCBC is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and MCBC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCBC Holdings 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 MCBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCBC Holdings has no effect on the direction of Marine Products i.e., Marine Products and MCBC Holdings go up and down completely randomly.
Pair Corralation between Marine Products and MCBC Holdings
Considering the 90-day investment horizon Marine Products is expected to generate 1.39 times more return on investment than MCBC Holdings. However, Marine Products is 1.39 times more volatile than MCBC Holdings. It trades about 0.08 of its potential returns per unit of risk. MCBC Holdings is currently generating about -0.28 per unit of risk. If you would invest 1,166 in Marine Products on February 8, 2024 and sell it today you would earn a total of 46.00 from holding Marine Products or generate 3.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Marine Products vs. MCBC Holdings
Performance |
Timeline |
Marine Products |
MCBC Holdings |
Marine Products and MCBC Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Marine Products and MCBC Holdings
The main advantage of trading using opposite Marine Products and MCBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products position performs unexpectedly, MCBC Holdings 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 MCBC Holdings will offset losses from the drop in MCBC Holdings' long position.Marine Products vs. Arcimoto | Marine Products vs. EZGO Technologies | Marine Products vs. LCI Industries | Marine Products vs. Curtiss Motorcycles |
MCBC Holdings vs. Arcimoto | MCBC Holdings vs. EZGO Technologies | MCBC Holdings vs. LCI Industries | MCBC Holdings vs. Curtiss Motorcycles |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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