Correlation Between Glencore Plc and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Glencore Plc 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 Glencore Plc and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore plc and Martin Marietta Materials, you can compare the effects of market volatilities on Glencore Plc 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 Glencore Plc with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore Plc and Martin Marietta.
Diversification Opportunities for Glencore Plc and Martin Marietta
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Glencore and Martin is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Glencore 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 Glencore Plc 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 Glencore 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 Glencore Plc i.e., Glencore Plc and Martin Marietta go up and down completely randomly.
Pair Corralation between Glencore Plc and Martin Marietta
Assuming the 90 days trading horizon Glencore plc is expected to under-perform the Martin Marietta. But the stock apears to be less risky and, when comparing its historical volatility, Glencore plc is 1.29 times less risky than Martin Marietta. The stock trades about -0.04 of its potential returns per unit of risk. The Martin Marietta Materials is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 669,466 in Martin Marietta Materials on September 5, 2024 and sell it today you would earn a total of 546,594 from holding Martin Marietta Materials or generate 81.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore plc vs. Martin Marietta Materials
Performance |
| Timeline |
| Glencore plc |
| Martin Marietta Materials |
Glencore Plc and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore Plc and Martin Marietta
The main advantage of trading using opposite Glencore Plc and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore Plc 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.| Glencore Plc vs. Genworth Financial | Glencore Plc vs. Capital One Financial | Glencore Plc vs. Applied Materials | Glencore Plc vs. UnitedHealth Group Incorporated |
| Martin Marietta vs. DXC Technology | Martin Marietta vs. Grupo Sports World | Martin Marietta vs. Delta Air Lines | Martin Marietta vs. Lloyds Banking Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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