Correlation Between CEMATRIX and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both CEMATRIX 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 CEMATRIX and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEMATRIX and Martin Marietta Materials, you can compare the effects of market volatilities on CEMATRIX 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 CEMATRIX with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEMATRIX and Martin Marietta.
Diversification Opportunities for CEMATRIX and Martin Marietta
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CEMATRIX and Martin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding CEMATRIX 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 CEMATRIX 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 CEMATRIX 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 CEMATRIX i.e., CEMATRIX and Martin Marietta go up and down completely randomly.
Pair Corralation between CEMATRIX and Martin Marietta
Assuming the 90 days horizon CEMATRIX is expected to generate 3.15 times more return on investment than Martin Marietta. However, CEMATRIX is 3.15 times more volatile than Martin Marietta Materials. It trades about 0.03 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.07 per unit of risk. If you would invest 14.00 in CEMATRIX on November 5, 2024 and sell it today you would earn a total of 2.00 from holding CEMATRIX or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEMATRIX vs. Martin Marietta Materials
Performance |
| Timeline |
| CEMATRIX |
| Martin Marietta Materials |
CEMATRIX and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEMATRIX and Martin Marietta
The main advantage of trading using opposite CEMATRIX and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEMATRIX 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.| CEMATRIX vs. Tecnoglass | CEMATRIX vs. Xinyi Glass Holdings | CEMATRIX vs. Anhui Conch Cement | CEMATRIX vs. Basanite |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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