Correlation Between Teradata Corp and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Teradata Corp 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 Teradata Corp and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradata Corp and Martin Marietta Materials, you can compare the effects of market volatilities on Teradata Corp 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 Teradata Corp with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradata Corp and Martin Marietta.
Diversification Opportunities for Teradata Corp and Martin Marietta
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Teradata and Martin is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Teradata Corp 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 Teradata Corp 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 Teradata Corp 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 Teradata Corp i.e., Teradata Corp and Martin Marietta go up and down completely randomly.
Pair Corralation between Teradata Corp and Martin Marietta
Assuming the 90 days horizon Teradata Corp is expected to generate 1.22 times more return on investment than Martin Marietta. However, Teradata Corp is 1.22 times more volatile than Martin Marietta Materials. It trades about 0.07 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about -0.16 per unit of risk. If you would invest 2,960 in Teradata Corp on October 28, 2024 and sell it today you would earn a total of 100.00 from holding Teradata Corp or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teradata Corp vs. Martin Marietta Materials
Performance |
| Timeline |
| Teradata Corp |
| Martin Marietta Materials |
Teradata Corp and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradata Corp and Martin Marietta
The main advantage of trading using opposite Teradata Corp and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradata Corp 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.| Teradata Corp vs. NetApp Inc | Teradata Corp vs. Pure Storage | Teradata Corp vs. NEXTDC LTD | Teradata Corp vs. SEIKOH GIKEN Co |
| Martin Marietta vs. Digilife Technologies Limited | Martin Marietta vs. Addtech AB | Martin Marietta vs. THORNEY TECHS LTD | Martin Marietta vs. Carsales |
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.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |