Correlation Between Martin Marietta and Weiss Korea
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Weiss Korea 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 Weiss Korea 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 Weiss Korea Opportunity, you can compare the effects of market volatilities on Martin Marietta and Weiss Korea 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 Weiss Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Weiss Korea.
Diversification Opportunities for Martin Marietta and Weiss Korea
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Martin and Weiss is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Weiss Korea Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weiss Korea Opportunity 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 Weiss Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weiss Korea Opportunity has no effect on the direction of Martin Marietta i.e., Martin Marietta and Weiss Korea go up and down completely randomly.
Pair Corralation between Martin Marietta and Weiss Korea
Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 1.42 times more return on investment than Weiss Korea. However, Martin Marietta is 1.42 times more volatile than Weiss Korea Opportunity. It trades about 0.08 of its potential returns per unit of risk. Weiss Korea Opportunity is currently generating about -0.03 per unit of risk. If you would invest 33,252 in Martin Marietta Materials on September 12, 2024 and sell it today you would earn a total of 24,439 from holding Martin Marietta Materials or generate 73.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.54% |
| Values | Daily Returns |
Martin Marietta Materials vs. Weiss Korea Opportunity
Performance |
| Timeline |
| Martin Marietta Materials |
| Weiss Korea Opportunity |
Martin Marietta and Weiss Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Weiss Korea
The main advantage of trading using opposite Martin Marietta and Weiss Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Weiss Korea 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 Weiss Korea will offset losses from the drop in Weiss Korea's long position.| Martin Marietta vs. Hong Kong Land | Martin Marietta vs. Neometals | Martin Marietta vs. Coor Service Management | Martin Marietta vs. Fidelity Sustainable USD |
| Weiss Korea vs. Samsung Electronics Co | Weiss Korea vs. Samsung Electronics Co | Weiss Korea vs. Hyundai Motor | Weiss Korea vs. Toyota Motor Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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