Correlation Between Martin Marietta and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Ashtead Technology 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 Ashtead Technology 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 Ashtead Technology Holdings, you can compare the effects of market volatilities on Martin Marietta and Ashtead Technology 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 Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Ashtead Technology.
Diversification Opportunities for Martin Marietta and Ashtead Technology
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Martin and Ashtead is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology 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 Ashtead Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Technology has no effect on the direction of Martin Marietta i.e., Martin Marietta and Ashtead Technology go up and down completely randomly.
Pair Corralation between Martin Marietta and Ashtead Technology
Assuming the 90 days trading horizon Martin Marietta Materials is expected to under-perform the Ashtead Technology. But the stock apears to be less risky and, when comparing its historical volatility, Martin Marietta Materials is 1.39 times less risky than Ashtead Technology. The stock trades about -0.38 of its potential returns per unit of risk. The Ashtead Technology Holdings is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 56,100 in Ashtead Technology Holdings on October 10, 2024 and sell it today you would lose (2,600) from holding Ashtead Technology Holdings or give up 4.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. Ashtead Technology Holdings
Performance |
| Timeline |
| Martin Marietta Materials |
| Ashtead Technology |
Martin Marietta and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Ashtead Technology
The main advantage of trading using opposite Martin Marietta and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Ashtead Technology 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 Ashtead Technology will offset losses from the drop in Ashtead Technology'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 |
| Ashtead Technology vs. Cornish Metals | Ashtead Technology vs. Sovereign Metals | Ashtead Technology vs. Axway Software SA | Ashtead Technology vs. Spirent Communications plc |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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