Correlation Between Martin Marietta and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Vienna Insurance 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 Vienna Insurance 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 Vienna Insurance Group, you can compare the effects of market volatilities on Martin Marietta and Vienna Insurance 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 Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Vienna Insurance.
Diversification Opportunities for Martin Marietta and Vienna Insurance
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Martin and Vienna is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance 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 Vienna Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vienna Insurance has no effect on the direction of Martin Marietta i.e., Martin Marietta and Vienna Insurance go up and down completely randomly.
Pair Corralation between Martin Marietta and Vienna Insurance
Assuming the 90 days trading horizon Martin Marietta Materials is expected to under-perform the Vienna Insurance. In addition to that, Martin Marietta is 3.11 times more volatile than Vienna Insurance Group. It trades about -0.32 of its total potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.25 per unit of volatility. If you would invest 2,945 in Vienna Insurance Group on October 11, 2024 and sell it today you would earn a total of 80.00 from holding Vienna Insurance Group or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Martin Marietta Materials vs. Vienna Insurance Group
Performance |
| Timeline |
| Martin Marietta Materials |
| Vienna Insurance |
Martin Marietta and Vienna Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Vienna Insurance
The main advantage of trading using opposite Martin Marietta and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Vienna Insurance 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 Vienna Insurance will offset losses from the drop in Vienna Insurance's long position.| Martin Marietta vs. Advanced Medical Solutions | Martin Marietta vs. Charter Communications Cl | Martin Marietta vs. Infrastrutture Wireless Italiane | Martin Marietta vs. Aeorema Communications Plc |
| Vienna Insurance vs. United States Steel | Vienna Insurance vs. Silver Bullet Data | Vienna Insurance vs. Ironveld Plc | Vienna Insurance vs. Impax Environmental Markets |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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