Correlation Between Fevertree Drinks and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Fevertree Drinks 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 Fevertree Drinks and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fevertree Drinks PLC and Martin Marietta Materials, you can compare the effects of market volatilities on Fevertree Drinks 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 Fevertree Drinks with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fevertree Drinks and Martin Marietta.
Diversification Opportunities for Fevertree Drinks and Martin Marietta
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fevertree and Martin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks PLC 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 Fevertree Drinks 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 Fevertree Drinks PLC 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 Fevertree Drinks i.e., Fevertree Drinks and Martin Marietta go up and down completely randomly.
Pair Corralation between Fevertree Drinks and Martin Marietta
Assuming the 90 days trading horizon Fevertree Drinks PLC is expected to generate 1.8 times more return on investment than Martin Marietta. However, Fevertree Drinks is 1.8 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 -0.16 per unit of risk. If you would invest 815.00 in Fevertree Drinks PLC on October 28, 2024 and sell it today you would lose (35.00) from holding Fevertree Drinks PLC or give up 4.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fevertree Drinks PLC vs. Martin Marietta Materials
Performance |
| Timeline |
| Fevertree Drinks PLC |
| Martin Marietta Materials |
Fevertree Drinks and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fevertree Drinks and Martin Marietta
The main advantage of trading using opposite Fevertree Drinks and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fevertree Drinks 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.| Fevertree Drinks vs. Harmony Gold Mining | Fevertree Drinks vs. KENEDIX OFFICE INV | Fevertree Drinks vs. STGEORGE MINING LTD | Fevertree Drinks vs. MAGNUM MINING EXP |
| Martin Marietta vs. Digilife Technologies Limited | Martin Marietta vs. Addtech AB | Martin Marietta vs. THORNEY TECHS LTD | Martin Marietta vs. Carsales |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |