Correlation Between Alfa SAB and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Alfa SAB 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 Alfa SAB and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa SAB de and Martin Marietta Materials, you can compare the effects of market volatilities on Alfa SAB 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 Alfa SAB with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa SAB and Martin Marietta.
Diversification Opportunities for Alfa SAB and Martin Marietta
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alfa and Martin is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alfa SAB de 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 Alfa SAB 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 Alfa SAB de 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 Alfa SAB i.e., Alfa SAB and Martin Marietta go up and down completely randomly.
Pair Corralation between Alfa SAB and Martin Marietta
Assuming the 90 days trading horizon Alfa SAB is expected to generate 2.93 times less return on investment than Martin Marietta. In addition to that, Alfa SAB is 1.22 times more volatile than Martin Marietta Materials. It trades about 0.05 of its total potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.17 per unit of volatility. If you would invest 1,034,960 in Martin Marietta Materials on September 13, 2024 and sell it today you would earn a total of 144,874 from holding Martin Marietta Materials or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa SAB de vs. Martin Marietta Materials
Performance |
| Timeline |
| Alfa SAB de |
| Martin Marietta Materials |
Alfa SAB and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa SAB and Martin Marietta
The main advantage of trading using opposite Alfa SAB and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa SAB 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.| Alfa SAB vs. Grupo Financiero Inbursa | Alfa SAB vs. Kimberly Clark de Mxico | Alfa SAB vs. Grupo Televisa SAB | Alfa SAB vs. Grupo Bimbo SAB |
| Martin Marietta vs. Grupo Mxico SAB | Martin Marietta vs. Alfa SAB de | Martin Marietta vs. Grupo Financiero Banorte | Martin Marietta vs. Fomento Econmico Mexicano |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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