Correlation Between Martin Marietta and Catena Media
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Catena Media 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 Catena Media 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 Catena Media PLC, you can compare the effects of market volatilities on Martin Marietta and Catena Media 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 Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Catena Media.
Diversification Opportunities for Martin Marietta and Catena Media
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Martin and Catena is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Catena Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media PLC 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 Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media PLC has no effect on the direction of Martin Marietta i.e., Martin Marietta and Catena Media go up and down completely randomly.
Pair Corralation between Martin Marietta and Catena Media
Assuming the 90 days trading horizon Martin Marietta Materials is expected to under-perform the Catena Media. But the stock apears to be less risky and, when comparing its historical volatility, Martin Marietta Materials is 4.75 times less risky than Catena Media. The stock trades about -0.37 of its potential returns per unit of risk. The Catena Media PLC is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 396.00 in Catena Media PLC on November 29, 2024 and sell it today you would lose (50.00) from holding Catena Media PLC or give up 12.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Martin Marietta Materials vs. Catena Media PLC
Performance |
| Timeline |
| Martin Marietta Materials |
| Catena Media PLC |
Martin Marietta and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Catena Media
The main advantage of trading using opposite Martin Marietta and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Catena Media 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 Catena Media will offset losses from the drop in Catena Media's long position.| Martin Marietta vs. JD Sports Fashion | Martin Marietta vs. Cornish Metals | Martin Marietta vs. Central Asia Metals | Martin Marietta vs. Southern Copper Corp |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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