Correlation Between Malibu Boats and MCBC Holdings
Can any of the company-specific risk be diversified away by investing in both Malibu Boats and MCBC Holdings 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 Malibu Boats and MCBC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malibu Boats and MCBC Holdings, you can compare the effects of market volatilities on Malibu Boats and MCBC Holdings 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 Malibu Boats with a short position of MCBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malibu Boats and MCBC Holdings.
Diversification Opportunities for Malibu Boats and MCBC Holdings
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Malibu and MCBC is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Malibu Boats and MCBC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCBC Holdings and Malibu Boats 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 Malibu Boats are associated (or correlated) with MCBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCBC Holdings has no effect on the direction of Malibu Boats i.e., Malibu Boats and MCBC Holdings go up and down completely randomly.
Pair Corralation between Malibu Boats and MCBC Holdings
Given the investment horizon of 90 days Malibu Boats is expected to under-perform the MCBC Holdings. In addition to that, Malibu Boats is 1.2 times more volatile than MCBC Holdings. It trades about -0.24 of its total potential returns per unit of risk. MCBC Holdings is currently generating about -0.05 per unit of volatility. If you would invest 2,206 in MCBC Holdings on January 25, 2024 and sell it today you would lose (101.00) from holding MCBC Holdings or give up 4.58% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Malibu Boats vs. MCBC Holdings
Performance |
Timeline |
Malibu Boats |
MCBC Holdings |
Malibu Boats and MCBC Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Malibu Boats and MCBC Holdings
The main advantage of trading using opposite Malibu Boats and MCBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malibu Boats position performs unexpectedly, MCBC Holdings 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 MCBC Holdings will offset losses from the drop in MCBC Holdings' long position.Malibu Boats vs. Thor Industries | Malibu Boats vs. BRP Inc | Malibu Boats vs. Brunswick | Malibu Boats vs. EZGO Technologies |
MCBC Holdings vs. Thor Industries | MCBC Holdings vs. BRP Inc | MCBC Holdings vs. Brunswick | MCBC Holdings vs. EZGO Technologies |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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