Correlation Between MG Credit and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both MG Credit 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 MG Credit and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MG Credit Income and Martin Marietta Materials, you can compare the effects of market volatilities on MG Credit 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 MG Credit with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of MG Credit and Martin Marietta.
Diversification Opportunities for MG Credit and Martin Marietta
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MGCI and Martin is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding MG Credit Income 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 MG Credit 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 MG Credit Income 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 MG Credit i.e., MG Credit and Martin Marietta go up and down completely randomly.
Pair Corralation between MG Credit and Martin Marietta
Assuming the 90 days trading horizon MG Credit is expected to generate 2.62 times less return on investment than Martin Marietta. But when comparing it to its historical volatility, MG Credit Income is 1.72 times less risky than Martin Marietta. It trades about 0.06 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 52,446 in Martin Marietta Materials on November 6, 2024 and sell it today you would earn a total of 1,202 from holding Martin Marietta Materials or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
MG Credit Income vs. Martin Marietta Materials
Performance |
| Timeline |
| MG Credit Income |
| Martin Marietta Materials |
MG Credit and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MG Credit and Martin Marietta
The main advantage of trading using opposite MG Credit and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MG Credit 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.| MG Credit vs. Cornish Metals | MG Credit vs. CleanTech Lithium plc | MG Credit vs. Jacquet Metal Service | MG Credit vs. Metals Exploration Plc |
| Martin Marietta vs. Summit Materials Cl | Martin Marietta vs. Cardinal Health | Martin Marietta vs. Abingdon Health Plc | Martin Marietta vs. MTI Wireless Edge |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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