Correlation Between Hong Kong and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Hong Kong 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 Hong Kong and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong Land and Martin Marietta Materials, you can compare the effects of market volatilities on Hong Kong 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 Hong Kong with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Martin Marietta.
Diversification Opportunities for Hong Kong and Martin Marietta
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hong and Martin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land 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 Hong Kong 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 Hong Kong Land 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 Hong Kong i.e., Hong Kong and Martin Marietta go up and down completely randomly.
Pair Corralation between Hong Kong and Martin Marietta
Assuming the 90 days trading horizon Hong Kong is expected to generate 8.01 times less return on investment than Martin Marietta. But when comparing it to its historical volatility, Hong Kong Land is 12.04 times less risky than Martin Marietta. It trades about 0.08 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 45,000 in Martin Marietta Materials on September 12, 2024 and sell it today you would earn a total of 12,691 from holding Martin Marietta Materials or generate 28.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.08% |
| Values | Daily Returns |
Hong Kong Land vs. Martin Marietta Materials
Performance |
| Timeline |
| Hong Kong Land |
| Martin Marietta Materials |
Hong Kong and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Martin Marietta
The main advantage of trading using opposite Hong Kong and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong 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.| Hong Kong vs. Wheaton Precious Metals | Hong Kong vs. Universal Display Corp | Hong Kong vs. Zoom Video Communications | Hong Kong vs. Cornish Metals |
| Martin Marietta vs. Hong Kong Land | Martin Marietta vs. Neometals | Martin Marietta vs. Coor Service Management | Martin Marietta vs. Fidelity Sustainable USD |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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