Correlation Between Martin Marietta and Aberdeen Diversified
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Aberdeen Diversified 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 Aberdeen Diversified 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 Aberdeen Diversified Income, you can compare the effects of market volatilities on Martin Marietta and Aberdeen Diversified 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 Aberdeen Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Aberdeen Diversified.
Diversification Opportunities for Martin Marietta and Aberdeen Diversified
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Martin and Aberdeen is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Aberdeen Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Diversified 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 Aberdeen Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Diversified has no effect on the direction of Martin Marietta i.e., Martin Marietta and Aberdeen Diversified go up and down completely randomly.
Pair Corralation between Martin Marietta and Aberdeen Diversified
Assuming the 90 days trading horizon Martin Marietta is expected to generate 1.22 times less return on investment than Aberdeen Diversified. But when comparing it to its historical volatility, Martin Marietta Materials is 1.07 times less risky than Aberdeen Diversified. It trades about 0.03 of its potential returns per unit of risk. Aberdeen Diversified Income is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,257 in Aberdeen Diversified Income on November 2, 2024 and sell it today you would earn a total of 253.00 from holding Aberdeen Diversified Income or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.29% |
| Values | Daily Returns |
Martin Marietta Materials vs. Aberdeen Diversified Income
Performance |
| Timeline |
| Martin Marietta Materials |
| Aberdeen Diversified |
Martin Marietta and Aberdeen Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Aberdeen Diversified
The main advantage of trading using opposite Martin Marietta and Aberdeen Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Aberdeen Diversified 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 Aberdeen Diversified will offset losses from the drop in Aberdeen Diversified's long position.| Martin Marietta vs. Games Workshop Group | Martin Marietta vs. AcadeMedia AB | Martin Marietta vs. CleanTech Lithium plc | Martin Marietta vs. One Media iP |
| Aberdeen Diversified vs. Cornish Metals | Aberdeen Diversified vs. Pfeiffer Vacuum Technology | Aberdeen Diversified vs. First Class Metals | Aberdeen Diversified vs. Vitec Software 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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