Correlation Between MarineMax and Bed Bath

Can any of the company-specific risk be diversified away by investing in both MarineMax and Bed Bath 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 Bed Bath into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MarineMax and Bed Bath Beyond, you can compare the effects of market volatilities on MarineMax and Bed Bath 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 Bed Bath. Check out your portfolio center. Please also check ongoing floating volatility patterns of MarineMax and Bed Bath.

Diversification Opportunities for MarineMax and Bed Bath

0.04

Correlation Coefficient

MarineMax  Bed Bath

Significant diversification

The 3 months correlation between MarineMax and Bed is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding MarineMax and Bed Bath Beyond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bed Bath Beyond 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 Bed Bath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bed Bath Beyond has no effect on the direction of MarineMax i.e., MarineMax and Bed Bath go up and down completely randomly.

Pair Corralation between MarineMax and Bed Bath

If you would invest  30.00  in Bed Bath Beyond on January 19, 2024 and sell it today you would earn a total of  0.00  from holding Bed Bath Beyond or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

MarineMax  vs.  Bed Bath Beyond

MarineMax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MarineMax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Bed Bath Beyond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bed Bath Beyond has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Bed Bath is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MarineMax and Bed Bath

The main advantage of trading using opposite MarineMax and Bed Bath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MarineMax position performs unexpectedly, Bed Bath 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 Bed Bath will offset losses from the drop in Bed Bath's long position.

The idea behind MarineMax and Bed Bath Beyond 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 the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.