Correlation Between GoldMining and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both GoldMining 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 GoldMining and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Martin Marietta Materials, you can compare the effects of market volatilities on GoldMining 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 GoldMining with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Martin Marietta.
Diversification Opportunities for GoldMining and Martin Marietta
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GoldMining and Martin is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining 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 GoldMining 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 GoldMining 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 GoldMining i.e., GoldMining and Martin Marietta go up and down completely randomly.
Pair Corralation between GoldMining and Martin Marietta
Assuming the 90 days trading horizon GoldMining is expected to generate 2.04 times more return on investment than Martin Marietta. However, GoldMining is 2.04 times more volatile than Martin Marietta Materials. It trades about -0.03 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about -0.36 per unit of risk. If you would invest 127.00 in GoldMining on September 12, 2024 and sell it today you would lose (2.00) from holding GoldMining or give up 1.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 68.18% |
| Values | Daily Returns |
GoldMining vs. Martin Marietta Materials
Performance |
| Timeline |
| GoldMining |
| Martin Marietta Materials |
GoldMining and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Martin Marietta
The main advantage of trading using opposite GoldMining and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining 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.| GoldMining vs. Hong Kong Land | GoldMining vs. Neometals | GoldMining vs. Coor Service Management | GoldMining vs. Fidelity Sustainable USD |
| Martin Marietta vs. Hong Kong Land | Martin Marietta vs. Neometals | Martin Marietta vs. Coor Service Management | Martin Marietta vs. Fidelity Sustainable USD |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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