Correlation Between Martin Marietta and Ecofin Global
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Ecofin Global 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 Ecofin Global 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 Ecofin Global Utilities, you can compare the effects of market volatilities on Martin Marietta and Ecofin Global 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 Ecofin Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Ecofin Global.
Diversification Opportunities for Martin Marietta and Ecofin Global
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Martin and Ecofin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Ecofin Global Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofin Global Utilities 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 Ecofin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofin Global Utilities has no effect on the direction of Martin Marietta i.e., Martin Marietta and Ecofin Global go up and down completely randomly.
Pair Corralation between Martin Marietta and Ecofin Global
Assuming the 90 days trading horizon Martin Marietta Materials is expected to under-perform the Ecofin Global. In addition to that, Martin Marietta is 1.3 times more volatile than Ecofin Global Utilities. It trades about -0.37 of its total potential returns per unit of risk. Ecofin Global Utilities is currently generating about 0.13 per unit of volatility. If you would invest 18,339 in Ecofin Global Utilities on November 29, 2024 and sell it today you would earn a total of 561.00 from holding Ecofin Global Utilities or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Martin Marietta Materials vs. Ecofin Global Utilities
Performance |
| Timeline |
| Martin Marietta Materials |
| Ecofin Global Utilities |
Martin Marietta and Ecofin Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Ecofin Global
The main advantage of trading using opposite Martin Marietta and Ecofin Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Ecofin Global 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 Ecofin Global will offset losses from the drop in Ecofin Global'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 |
| Ecofin Global vs. Southern Copper Corp | Ecofin Global vs. Fulcrum Metals PLC | Ecofin Global vs. Empire Metals Limited | Ecofin Global vs. Synthomer 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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