Correlation Between Geely Automobile and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Geely Automobile 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 Geely Automobile and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and Martin Marietta Materials, you can compare the effects of market volatilities on Geely Automobile 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 Geely Automobile with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Martin Marietta.
Diversification Opportunities for Geely Automobile and Martin Marietta
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Geely and Martin is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings 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 Geely Automobile 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 Geely Automobile Holdings 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 Geely Automobile i.e., Geely Automobile and Martin Marietta go up and down completely randomly.
Pair Corralation between Geely Automobile and Martin Marietta
Assuming the 90 days horizon Geely Automobile is expected to generate 19.93 times less return on investment than Martin Marietta. In addition to that, Geely Automobile is 1.56 times more volatile than Martin Marietta Materials. It trades about 0.01 of its total potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.23 per unit of volatility. If you would invest 50,160 in Martin Marietta Materials on November 7, 2024 and sell it today you would earn a total of 2,440 from holding Martin Marietta Materials or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Martin Marietta Materials
Performance |
| Timeline |
| Geely Automobile Holdings |
| Martin Marietta Materials |
Geely Automobile and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Martin Marietta
The main advantage of trading using opposite Geely Automobile and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile 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.| Geely Automobile vs. Tesla Inc | Geely Automobile vs. Toyota Motor | Geely Automobile vs. Toyota Motor | Geely Automobile vs. BYD Company Limited |
| Martin Marietta vs. HYATT HOTELS A | Martin Marietta vs. MCEWEN MINING INC | Martin Marietta vs. Sunstone Hotel Investors | Martin Marietta vs. Calibre Mining Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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