Correlation Between DAX Index and Martin Marietta
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By analyzing existing cross correlation between DAX Index and Martin Marietta Materials, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Martin Marietta.
Diversification Opportunities for DAX Index and Martin Marietta
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Martin is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index 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 DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Martin Marietta go up and down completely randomly.
Pair Corralation between DAX Index and Martin Marietta
Assuming the 90 days trading horizon DAX Index is expected to generate 1.5 times less return on investment than Martin Marietta. But when comparing it to its historical volatility, DAX Index is 1.98 times less risky than Martin Marietta. It trades about 0.05 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 52,494 in Martin Marietta Materials on August 31, 2024 and sell it today you would earn a total of 3,706 from holding Martin Marietta Materials or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Martin Marietta Materials
Performance |
| Timeline |
DAX Index and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Martin Marietta Materials
Pair trading matchups for Martin Marietta
Pair Trading with DAX Index and Martin Marietta
The main advantage of trading using opposite DAX Index and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. Magnachip Semiconductor | DAX Index vs. Taiwan Semiconductor Manufacturing | DAX Index vs. Broadcom | DAX Index vs. MagnaChip Semiconductor Corp |
| Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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