Correlation Between Academy Sports and Marinemax

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Can any of the company-specific risk be diversified away by investing in both Academy Sports 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 Academy Sports and Marinemax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Academy Sports And and Marinemax, you can compare the effects of market volatilities on Academy Sports 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 Academy Sports with a short position of Marinemax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Marinemax.

Diversification Opportunities for Academy Sports and Marinemax

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Academy and Marinemax is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports And and Marinemax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marinemax and Academy Sports 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 Academy Sports And 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 Academy Sports i.e., Academy Sports and Marinemax go up and down completely randomly.

Pair Corralation between Academy Sports and Marinemax

Considering the 90-day investment horizon Academy Sports And is expected to generate 1.09 times more return on investment than Marinemax. However, Academy Sports is 1.09 times more volatile than Marinemax. It trades about 0.27 of its potential returns per unit of risk. Marinemax is currently generating about 0.04 per unit of risk. If you would invest  3,799  in Academy Sports And on May 13, 2022 and sell it today you would earn a total of  689.00  from holding Academy Sports And or generate 18.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Academy Sports And  vs.  Marinemax

 Performance (%) 
       Timeline  
Academy Sports And 
Academy Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Academy Sports And are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Academy Sports disclosed solid returns over the last few months and may actually be approaching a breakup point.

Academy Price Channel

Marinemax 
Marinemax Performance
0 of 100
Over the last 90 days Marinemax has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Marinemax is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Marinemax Price Channel

Academy Sports and Marinemax Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Academy Sports and Marinemax

The main advantage of trading using opposite Academy Sports and Marinemax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports 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.
The idea behind Academy Sports And and Marinemax pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 CEO Directory module to screen CEOs from public companies around the world.

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