Correlation Between Axfood AB and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Axfood AB 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 Axfood AB and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Martin Marietta Materials, you can compare the effects of market volatilities on Axfood AB 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 Axfood AB with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Martin Marietta.
Diversification Opportunities for Axfood AB and Martin Marietta
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Axfood and Martin is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB 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 Axfood AB 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 Axfood AB 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 Axfood AB i.e., Axfood AB and Martin Marietta go up and down completely randomly.
Pair Corralation between Axfood AB and Martin Marietta
Assuming the 90 days trading horizon Axfood AB is expected to generate 3.13 times less return on investment than Martin Marietta. But when comparing it to its historical volatility, Axfood AB is 1.65 times less risky than Martin Marietta. It trades about 0.1 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 52,818 in Martin Marietta Materials on October 25, 2024 and sell it today you would earn a total of 2,536 from holding Martin Marietta Materials or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 78.95% |
| Values | Daily Returns |
Axfood AB vs. Martin Marietta Materials
Performance |
| Timeline |
| Axfood AB |
| Martin Marietta Materials |
Axfood AB and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Martin Marietta
The main advantage of trading using opposite Axfood AB and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB 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.| Axfood AB vs. Jacquet Metal Service | Axfood AB vs. Empire Metals Limited | Axfood AB vs. Liechtensteinische Landesbank AG | Axfood AB vs. Molson Coors Beverage |
| Martin Marietta vs. Toyota Motor Corp | Martin Marietta vs. SoftBank Group Corp | Martin Marietta vs. OTP Bank Nyrt | Martin Marietta vs. ONEOK Inc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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