Correlation Between Martin Marietta and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Jacquet Metal 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 Martin Marietta and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Martin Marietta Materials and Jacquet Metal Service, you can compare the effects of market volatilities on Martin Marietta and Jacquet Metal 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 Martin Marietta with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Jacquet Metal.
Diversification Opportunities for Martin Marietta and Jacquet Metal
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Martin and Jacquet is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service and Martin Marietta 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 Martin Marietta Materials are associated (or correlated) with Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Martin Marietta i.e., Martin Marietta and Jacquet Metal go up and down completely randomly.
Pair Corralation between Martin Marietta and Jacquet Metal
Assuming the 90 days trading horizon Martin Marietta Materials is expected to under-perform the Jacquet Metal. But the stock apears to be less risky and, when comparing its historical volatility, Martin Marietta Materials is 1.71 times less risky than Jacquet Metal. The stock trades about -0.36 of its potential returns per unit of risk. The Jacquet Metal Service is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,591 in Jacquet Metal Service on September 12, 2024 and sell it today you would earn a total of 74.00 from holding Jacquet Metal Service or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Martin Marietta Materials vs. Jacquet Metal Service
Performance |
| Timeline |
| Martin Marietta Materials |
| Jacquet Metal Service |
Martin Marietta and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Jacquet Metal
The main advantage of trading using opposite Martin Marietta and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| Martin Marietta vs. Hong Kong Land | Martin Marietta vs. Neometals | Martin Marietta vs. Coor Service Management | Martin Marietta vs. Fidelity Sustainable USD |
| Jacquet Metal vs. Hong Kong Land | Jacquet Metal vs. Neometals | Jacquet Metal vs. Coor Service Management | Jacquet Metal vs. Fidelity Sustainable USD |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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