Correlation Between Medical Properties and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Martin Marietta 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 Medical Properties and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Properties Trust and Martin Marietta Materials, you can compare the effects of market volatilities on Medical Properties and Martin Marietta 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 Medical Properties with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Martin Marietta.
Diversification Opportunities for Medical Properties and Martin Marietta
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medical and Martin is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Martin Marietta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Marietta Materials and Medical Properties 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 Medical Properties Trust are associated (or correlated) with Martin Marietta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Marietta Materials has no effect on the direction of Medical Properties i.e., Medical Properties and Martin Marietta go up and down completely randomly.
Pair Corralation between Medical Properties and Martin Marietta
Assuming the 90 days trading horizon Medical Properties Trust is expected to under-perform the Martin Marietta. In addition to that, Medical Properties is 1.64 times more volatile than Martin Marietta Materials. It trades about -0.14 of its total potential returns per unit of risk. Martin Marietta Materials is currently generating about -0.05 per unit of volatility. If you would invest 60,947 in Martin Marietta Materials on August 31, 2024 and sell it today you would lose (1,431) from holding Martin Marietta Materials or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Martin Marietta Materials
Performance |
| Timeline |
| Medical Properties Trust |
| Martin Marietta Materials |
Medical Properties and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Martin Marietta
The main advantage of trading using opposite Medical Properties and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Martin Marietta 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 Martin Marietta will offset losses from the drop in Martin Marietta's long position.| Medical Properties vs. Fevertree Drinks Plc | Medical Properties vs. Gaming Realms plc | Medical Properties vs. Blackstone Loan Financing | Medical Properties vs. Liontrust Asset Management |
| Martin Marietta vs. Neometals | Martin Marietta vs. Coor Service Management | Martin Marietta vs. Aeorema Communications Plc | Martin Marietta vs. JLEN Environmental Assets |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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