Correlation Between Martin Marietta and ONEOK
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and ONEOK 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 ONEOK 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 ONEOK Inc, you can compare the effects of market volatilities on Martin Marietta and ONEOK 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 ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and ONEOK.
Diversification Opportunities for Martin Marietta and ONEOK
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Martin and ONEOK is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc 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 ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of Martin Marietta i.e., Martin Marietta and ONEOK go up and down completely randomly.
Pair Corralation between Martin Marietta and ONEOK
Assuming the 90 days trading horizon Martin Marietta is expected to generate 1.09 times less return on investment than ONEOK. In addition to that, Martin Marietta is 1.09 times more volatile than ONEOK Inc. It trades about 0.06 of its total potential returns per unit of risk. ONEOK Inc is currently generating about 0.07 per unit of volatility. If you would invest 6,283 in ONEOK Inc on October 11, 2024 and sell it today you would earn a total of 3,929 from holding ONEOK Inc or generate 62.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.91% |
| Values | Daily Returns |
Martin Marietta Materials vs. ONEOK Inc
Performance |
| Timeline |
| Martin Marietta Materials |
| ONEOK Inc |
Martin Marietta and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and ONEOK
The main advantage of trading using opposite Martin Marietta and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.| Martin Marietta vs. Planet Fitness Cl | Martin Marietta vs. Ashtead Technology Holdings | Martin Marietta vs. Made Tech Group | Martin Marietta vs. Smarttech247 Group PLC |
| ONEOK vs. Roadside Real Estate | ONEOK vs. Gamma Communications PLC | ONEOK vs. Batm Advanced Communications | ONEOK vs. Martin Marietta Materials |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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