Correlation Between Marinemax and Walmart

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

Diversification Opportunities for Marinemax and Walmart

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Marinemax and Walmart is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Marinemax and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Marinemax 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 Marinemax are associated (or correlated) with Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Marinemax i.e., Marinemax and Walmart go up and down completely randomly.

Pair Corralation between Marinemax and Walmart

Considering the 90-day investment horizon Marinemax is expected to generate 3.6 times less return on investment than Walmart. In addition to that, Marinemax is 1.09 times more volatile than Walmart. It trades about 0.02 of its total potential returns per unit of risk. Walmart is currently generating about 0.08 per unit of volatility. If you would invest  12,821  in Walmart on May 18, 2022 and sell it today you would earn a total of  439.00  from holding Walmart or generate 3.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Marinemax  vs.  Walmart

 Performance (%) 
       Timeline  
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 new stock price mess, may contribute to short-term losses for the institutional investors.

Marinemax Price Channel

Walmart 
Walmart Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively sluggish primary indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Walmart Price Channel

Marinemax and Walmart Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marinemax and Walmart

The main advantage of trading using opposite Marinemax and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marinemax position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.
The idea behind Marinemax and Walmart 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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