Correlation Between Martin Marietta and Guaranty Trust
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Guaranty Trust 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 Guaranty Trust 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 Guaranty Trust Holding, you can compare the effects of market volatilities on Martin Marietta and Guaranty Trust 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 Guaranty Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Guaranty Trust.
Diversification Opportunities for Martin Marietta and Guaranty Trust
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Martin and Guaranty is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Guaranty Trust Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guaranty Trust Holding 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 Guaranty Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guaranty Trust Holding has no effect on the direction of Martin Marietta i.e., Martin Marietta and Guaranty Trust go up and down completely randomly.
Pair Corralation between Martin Marietta and Guaranty Trust
Assuming the 90 days trading horizon Martin Marietta is expected to generate 2.81 times less return on investment than Guaranty Trust. But when comparing it to its historical volatility, Martin Marietta Materials is 1.51 times less risky than Guaranty Trust. It trades about 0.19 of its potential returns per unit of risk. Guaranty Trust Holding is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 179.00 in Guaranty Trust Holding on October 24, 2024 and sell it today you would earn a total of 35.00 from holding Guaranty Trust Holding or generate 19.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 73.68% |
| Values | Daily Returns |
Martin Marietta Materials vs. Guaranty Trust Holding
Performance |
| Timeline |
| Martin Marietta Materials |
| Guaranty Trust Holding |
Martin Marietta and Guaranty Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Guaranty Trust
The main advantage of trading using opposite Martin Marietta and Guaranty Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Guaranty Trust 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 Guaranty Trust will offset losses from the drop in Guaranty Trust's long position.| Martin Marietta vs. Liechtensteinische Landesbank AG | Martin Marietta vs. Zurich Insurance Group | Martin Marietta vs. Sydbank | Martin Marietta vs. Ally Financial |
| Guaranty Trust vs. Games Workshop Group | Guaranty Trust vs. LPKF Laser Electronics | Guaranty Trust vs. Take Two Interactive Software | Guaranty Trust vs. Martin Marietta Materials |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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