Correlation Between Kinnevik Investment and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment 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 Kinnevik Investment and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinnevik Investment AB and Martin Marietta Materials, you can compare the effects of market volatilities on Kinnevik Investment 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 Kinnevik Investment with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Martin Marietta.
Diversification Opportunities for Kinnevik Investment and Martin Marietta
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinnevik and Martin is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment 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 Kinnevik Investment 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 Kinnevik Investment 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 Kinnevik Investment i.e., Kinnevik Investment and Martin Marietta go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Martin Marietta
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 0.99 times more return on investment than Martin Marietta. However, Kinnevik Investment AB is 1.01 times less risky than Martin Marietta. It trades about 0.02 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.02 per unit of risk. If you would invest 7,558 in Kinnevik Investment AB on September 1, 2024 and sell it today you would earn a total of 42.00 from holding Kinnevik Investment AB or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Martin Marietta Materials
Performance |
| Timeline |
| Kinnevik Investment |
| Martin Marietta Materials |
Kinnevik Investment and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Martin Marietta
The main advantage of trading using opposite Kinnevik Investment and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment 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.| Kinnevik Investment vs. Arrow Electronics | Kinnevik Investment vs. Odfjell Drilling | Kinnevik Investment vs. Zanaga Iron Ore | Kinnevik Investment vs. Electronic Arts |
| Martin Marietta vs. AMG Advanced Metallurgical | Martin Marietta vs. Litigation Capital Management | Martin Marietta vs. SBM Offshore NV | Martin Marietta vs. Jupiter Fund Management |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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