Correlation Between Anglo Asian and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Anglo Asian 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 Anglo Asian and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anglo Asian Mining and Martin Marietta Materials, you can compare the effects of market volatilities on Anglo Asian 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 Anglo Asian with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and Martin Marietta.
Diversification Opportunities for Anglo Asian and Martin Marietta
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Anglo and Martin is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining 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 Anglo Asian 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 Anglo Asian Mining 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 Anglo Asian i.e., Anglo Asian and Martin Marietta go up and down completely randomly.
Pair Corralation between Anglo Asian and Martin Marietta
Assuming the 90 days trading horizon Anglo Asian Mining is expected to generate 1.02 times more return on investment than Martin Marietta. However, Anglo Asian is 1.02 times more volatile than Martin Marietta Materials. It trades about -0.04 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about -0.38 per unit of risk. If you would invest 10,450 in Anglo Asian Mining on October 10, 2024 and sell it today you would lose (200.00) from holding Anglo Asian Mining or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Anglo Asian Mining vs. Martin Marietta Materials
Performance |
| Timeline |
| Anglo Asian Mining |
| Martin Marietta Materials |
Anglo Asian and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Asian and Martin Marietta
The main advantage of trading using opposite Anglo Asian and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Asian 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.| Anglo Asian vs. Charter Communications Cl | Anglo Asian vs. Morgan Advanced Materials | Anglo Asian vs. MTI Wireless Edge | Anglo Asian vs. Blackstone Loan Financing |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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