Correlation Between Best Buy and MarineMax

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

By analyzing existing cross correlation between Best Buy Co and MarineMax, you can compare the effects of market volatilities on Best Buy 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 Best Buy with a short position of MarineMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Best Buy and MarineMax.

Diversification Opportunities for Best Buy and MarineMax

0.39

Correlation Coefficient

Best Buy  MarineMax

Weak diversification

The 3 months correlation between Best and MarineMax is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Best Buy Co and MarineMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarineMax and Best Buy 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 Best Buy Co 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 Best Buy i.e., Best Buy and MarineMax go up and down completely randomly.

Pair Corralation between Best Buy and MarineMax

Considering the 90-day investment horizon Best Buy Co is expected to under-perform the MarineMax. But the stock apears to be less risky and, when comparing its historical volatility, Best Buy Co is 1.76 times less risky than MarineMax. The stock trades about 0.0 of its potential returns per unit of risk. The MarineMax is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,097  in MarineMax on May 7, 2025 and sell it today you would earn a total of  172.00  from holding MarineMax or generate 8.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Best Buy Co  vs.  MarineMax

Best Buy

Risk-Adjusted Performance

Weakest

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

MarineMax

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in MarineMax are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, MarineMax displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Best Buy and MarineMax

The main advantage of trading using opposite Best Buy and MarineMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Best Buy 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.

The idea behind Best Buy Co 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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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.