Correlation Between Martin Marietta and Ferrexpo PLC
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Ferrexpo PLC 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 Ferrexpo PLC 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 Ferrexpo PLC, you can compare the effects of market volatilities on Martin Marietta and Ferrexpo PLC 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 Ferrexpo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Ferrexpo PLC.
Diversification Opportunities for Martin Marietta and Ferrexpo PLC
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Martin and Ferrexpo is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Ferrexpo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrexpo 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 Ferrexpo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrexpo PLC has no effect on the direction of Martin Marietta i.e., Martin Marietta and Ferrexpo PLC go up and down completely randomly.
Pair Corralation between Martin Marietta and Ferrexpo PLC
Assuming the 90 days trading horizon Martin Marietta Materials is expected to under-perform the Ferrexpo PLC. But the stock apears to be less risky and, when comparing its historical volatility, Martin Marietta Materials is 3.61 times less risky than Ferrexpo PLC. The stock trades about -0.38 of its potential returns per unit of risk. The Ferrexpo PLC is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 7,710 in Ferrexpo PLC on September 24, 2024 and sell it today you would earn a total of 2,550 from holding Ferrexpo PLC or generate 33.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Martin Marietta Materials vs. Ferrexpo PLC
Performance |
| Timeline |
| Martin Marietta Materials |
| Ferrexpo PLC |
Martin Marietta and Ferrexpo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Ferrexpo PLC
The main advantage of trading using opposite Martin Marietta and Ferrexpo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Ferrexpo PLC 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 Ferrexpo PLC will offset losses from the drop in Ferrexpo PLC'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 |
| Ferrexpo PLC vs. Panther Metals PLC | Ferrexpo PLC vs. Silvercorp Metals | Ferrexpo PLC vs. GreenX Metals | Ferrexpo PLC vs. Fulcrum Metals 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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