Correlation Between GMxico Transportes and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both GMxico Transportes 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 GMxico Transportes and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMxico Transportes SAB and Martin Marietta Materials, you can compare the effects of market volatilities on GMxico Transportes 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 GMxico Transportes with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and Martin Marietta.
Diversification Opportunities for GMxico Transportes and Martin Marietta
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GMxico and Martin is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB 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 GMxico Transportes 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 GMxico Transportes SAB 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 GMxico Transportes i.e., GMxico Transportes and Martin Marietta go up and down completely randomly.
Pair Corralation between GMxico Transportes and Martin Marietta
Assuming the 90 days trading horizon GMxico Transportes SAB is expected to under-perform the Martin Marietta. But the stock apears to be less risky and, when comparing its historical volatility, GMxico Transportes SAB is 1.24 times less risky than Martin Marietta. The stock trades about -0.09 of its potential returns per unit of risk. The Martin Marietta Materials is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,008,991 in Martin Marietta Materials on August 30, 2024 and sell it today you would earn a total of 203,509 from holding Martin Marietta Materials or generate 20.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMxico Transportes SAB vs. Martin Marietta Materials
Performance |
| Timeline |
| GMxico Transportes SAB |
| Martin Marietta Materials |
GMxico Transportes and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMxico Transportes and Martin Marietta
The main advantage of trading using opposite GMxico Transportes and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMxico Transportes 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.| GMxico Transportes vs. Grupo Mxico SAB | GMxico Transportes vs. The Select Sector | GMxico Transportes vs. SPDR Series Trust | GMxico Transportes vs. FibroGen |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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