Correlation Between Andrews Sykes and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Andrews Sykes 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 Andrews Sykes and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andrews Sykes Group and Martin Marietta Materials, you can compare the effects of market volatilities on Andrews Sykes 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 Andrews Sykes with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andrews Sykes and Martin Marietta.
Diversification Opportunities for Andrews Sykes and Martin Marietta
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Andrews and Martin is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Andrews Sykes Group 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 Andrews Sykes 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 Andrews Sykes Group 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 Andrews Sykes i.e., Andrews Sykes and Martin Marietta go up and down completely randomly.
Pair Corralation between Andrews Sykes and Martin Marietta
Assuming the 90 days trading horizon Andrews Sykes is expected to generate 2.39 times less return on investment than Martin Marietta. But when comparing it to its historical volatility, Andrews Sykes Group is 1.19 times less risky than Martin Marietta. It trades about 0.04 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 34,717 in Martin Marietta Materials on September 4, 2024 and sell it today you would earn a total of 24,732 from holding Martin Marietta Materials or generate 71.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.86% |
| Values | Daily Returns |
Andrews Sykes Group vs. Martin Marietta Materials
Performance |
| Timeline |
| Andrews Sykes Group |
| Martin Marietta Materials |
Andrews Sykes and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andrews Sykes and Martin Marietta
The main advantage of trading using opposite Andrews Sykes and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andrews Sykes 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.| Andrews Sykes vs. Cornish Metals | Andrews Sykes vs. Broadcom | Andrews Sykes vs. Trainline Plc | Andrews Sykes vs. GreenX Metals |
| Martin Marietta vs. Samsung Electronics Co | Martin Marietta vs. Samsung Electronics Co | Martin Marietta vs. Hyundai Motor | Martin Marietta vs. Toyota Motor Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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