Correlation Between Pet Acquisition and MarineMax

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

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

Diversification Opportunities for Pet Acquisition and MarineMax

-0.35

Correlation Coefficient

Pet Acquisition  MarineMax

Very good diversification

The 3 months correlation between Pet and MarineMax is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Pet Acquisition LLC and MarineMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarineMax and Pet Acquisition 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 Pet Acquisition LLC 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 Pet Acquisition i.e., Pet Acquisition and MarineMax go up and down completely randomly.

Pair Corralation between Pet Acquisition and MarineMax

Given the investment horizon of 90 days Pet Acquisition is expected to generate 3.63 times less return on investment than MarineMax. In addition to that, Pet Acquisition is 1.54 times more volatile than MarineMax. It trades about 0.01 of its total potential returns per unit of risk. MarineMax is currently generating about 0.05 per unit of volatility. 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Pet Acquisition LLC  vs.  MarineMax

Pet Acquisition LLC

Risk-Adjusted Performance

Weak

Over the last 90 days Pet Acquisition LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Pet Acquisition is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

MarineMax

Risk-Adjusted Performance

Insignificant

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 Pet Acquisition and MarineMax

The main advantage of trading using opposite Pet Acquisition and MarineMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pet Acquisition 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 Pet Acquisition LLC 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.