Correlation Between Anhui Conch and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Anhui Conch 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 Anhui Conch and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anhui Conch Cement and Martin Marietta Materials, you can compare the effects of market volatilities on Anhui Conch 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 Anhui Conch with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Conch and Martin Marietta.
Diversification Opportunities for Anhui Conch and Martin Marietta
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anhui and Martin is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Conch Cement 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 Anhui Conch 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 Anhui Conch Cement 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 Anhui Conch i.e., Anhui Conch and Martin Marietta go up and down completely randomly.
Pair Corralation between Anhui Conch and Martin Marietta
Assuming the 90 days horizon Anhui Conch Cement is expected to generate 1.79 times more return on investment than Martin Marietta. However, Anhui Conch is 1.79 times more volatile than Martin Marietta Materials. It trades about 0.05 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.04 per unit of risk. If you would invest 1,026 in Anhui Conch Cement on November 5, 2024 and sell it today you would earn a total of 318.00 from holding Anhui Conch Cement or generate 30.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.65% |
| Values | Daily Returns |
Anhui Conch Cement vs. Martin Marietta Materials
Performance |
| Timeline |
| Anhui Conch Cement |
| Martin Marietta Materials |
Anhui Conch and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Conch and Martin Marietta
The main advantage of trading using opposite Anhui Conch and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Conch 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.| Anhui Conch vs. Buzzi Unicem SpA | Anhui Conch vs. Wienerberger Baustoffindustrie | Anhui Conch vs. Lafargeholcim Ltd ADR | Anhui Conch vs. HeidelbergCement AG ADR |
| Martin Marietta vs. CRH PLC ADR | Martin Marietta vs. Eagle Materials | Martin Marietta vs. Summit Materials | Martin Marietta vs. United States Lime |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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