Correlation Between B of A and Marinemax

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

Diversification Opportunities for B of A and Marinemax

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between B of A and Marinemax is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bank Of America and Marinemax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marinemax and B of A 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 Bank Of America 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 B of A i.e., B of A and Marinemax go up and down completely randomly.

Pair Corralation between B of A and Marinemax

Considering the 90-day investment horizon B of A is expected to generate 1.03 times less return on investment than Marinemax. But when comparing it to its historical volatility, Bank Of America is 1.75 times less risky than Marinemax. It trades about 0.04 of its potential returns per unit of risk. Marinemax is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,678  in Marinemax on June 27, 2022 and sell it today you would earn a total of  322.00  from holding Marinemax or generate 12.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Bank Of America  vs.  Marinemax

 Performance (%) 
       Timeline  
Bank Of America 
B of A Performance
0 of 100
Over the last 90 days Bank Of America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, B of A is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

B of A 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 weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in October 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Marinemax Price Channel

B of A and Marinemax Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with B of A and Marinemax

The main advantage of trading using opposite B of A and Marinemax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B of A 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.
B of A vs. China Construction B
The idea behind Bank Of America 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.
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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