Correlation Between Harley Davidson and Malibu Boats

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

Diversification Opportunities for Harley Davidson and Malibu Boats

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Harley and Malibu is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Harley-Davidson and Malibu Boats in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malibu Boats and Harley Davidson 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 Harley-Davidson are associated (or correlated) with Malibu Boats. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malibu Boats has no effect on the direction of Harley Davidson i.e., Harley Davidson and Malibu Boats go up and down completely randomly.

Pair Corralation between Harley Davidson and Malibu Boats

Considering the 90-day investment horizon Harley-Davidson is expected to generate 1.08 times more return on investment than Malibu Boats. However, Harley Davidson is 1.08 times more volatile than Malibu Boats. It trades about -0.08 of its potential returns per unit of risk. Malibu Boats is currently generating about -0.12 per unit of risk. If you would invest  3,517  in Harley-Davidson on March 27, 2022 and sell it today you would lose (237.00)  from holding Harley-Davidson or give up 6.74% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Harley-Davidson  vs.  Malibu Boats

 Performance (%) 
      Timeline 
Harley-Davidson 
Harley Performance
0 of 100
Over the last 90 days Harley-Davidson has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.02
Payout Ratio
0.15
Last Split Factor
2:1
Forward Annual Dividend Rate
0.63
Dividend Date
2022-06-17
Ex Dividend Date
2022-06-01
Last Split Date
2000-04-10

Harley Price Channel

Malibu Boats 
Malibu Performance
0 of 100
Over the last 90 days Malibu Boats has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Malibu Price Channel

Harley Davidson and Malibu Boats Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Harley Davidson and Malibu Boats

The main advantage of trading using opposite Harley Davidson and Malibu Boats positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harley Davidson position performs unexpectedly, Malibu Boats 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 Malibu Boats will offset losses from the drop in Malibu Boats' long position.
The idea behind Harley-Davidson and Malibu Boats 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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