Correlation Between Martin Marietta and Datagroup
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Datagroup 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 Datagroup 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 Datagroup SE, you can compare the effects of market volatilities on Martin Marietta and Datagroup 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 Datagroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Datagroup.
Diversification Opportunities for Martin Marietta and Datagroup
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Martin and Datagroup is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Datagroup SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datagroup SE 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 Datagroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datagroup SE has no effect on the direction of Martin Marietta i.e., Martin Marietta and Datagroup go up and down completely randomly.
Pair Corralation between Martin Marietta and Datagroup
Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 0.67 times more return on investment than Datagroup. However, Martin Marietta Materials is 1.49 times less risky than Datagroup. It trades about 0.14 of its potential returns per unit of risk. Datagroup SE is currently generating about 0.08 per unit of risk. If you would invest 52,439 in Martin Marietta Materials on September 2, 2024 and sell it today you would earn a total of 7,561 from holding Martin Marietta Materials or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.97% |
| Values | Daily Returns |
Martin Marietta Materials vs. Datagroup SE
Performance |
| Timeline |
| Martin Marietta Materials |
| Datagroup SE |
Martin Marietta and Datagroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Datagroup
The main advantage of trading using opposite Martin Marietta and Datagroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Datagroup 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 Datagroup will offset losses from the drop in Datagroup's long position.| Martin Marietta vs. Uniper SE | Martin Marietta vs. Mulberry Group PLC | Martin Marietta vs. London Security Plc | Martin Marietta vs. Triad Group PLC |
| Datagroup vs. Evolution Gaming Group | Datagroup vs. AfriTin Mining | Datagroup vs. Southwest Airlines Co | Datagroup vs. Games Workshop Group |
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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