Correlation Between Martin Marietta and Financiera Independencia
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Financiera Independencia 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 Martin Marietta and Financiera Independencia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Martin Marietta Materials and Financiera Independencia SAB, you can compare the effects of market volatilities on Martin Marietta and Financiera Independencia 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 Martin Marietta with a short position of Financiera Independencia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Financiera Independencia.
Diversification Opportunities for Martin Marietta and Financiera Independencia
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Martin and Financiera is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Financiera Independencia SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financiera Independencia and Martin Marietta 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 Martin Marietta Materials are associated (or correlated) with Financiera Independencia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financiera Independencia has no effect on the direction of Martin Marietta i.e., Martin Marietta and Financiera Independencia go up and down completely randomly.
Pair Corralation between Martin Marietta and Financiera Independencia
Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 1.34 times more return on investment than Financiera Independencia. However, Martin Marietta is 1.34 times more volatile than Financiera Independencia SAB. It trades about 0.09 of its potential returns per unit of risk. Financiera Independencia SAB is currently generating about -0.02 per unit of risk. If you would invest 773,522 in Martin Marietta Materials on September 14, 2024 and sell it today you would earn a total of 341,335 from holding Martin Marietta Materials or generate 44.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Martin Marietta Materials vs. Financiera Independencia SAB
Performance |
| Timeline |
| Martin Marietta Materials |
| Financiera Independencia |
Martin Marietta and Financiera Independencia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Financiera Independencia
The main advantage of trading using opposite Martin Marietta and Financiera Independencia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Financiera Independencia 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 Financiera Independencia will offset losses from the drop in Financiera Independencia's long position.| Martin Marietta vs. Grupo Mxico SAB | Martin Marietta vs. Alfa SAB de | Martin Marietta vs. Grupo Financiero Banorte | Martin Marietta vs. Fomento Econmico Mexicano |
| Financiera Independencia vs. Prudential Financial | Financiera Independencia vs. Martin Marietta Materials | Financiera Independencia vs. The Bank of | Financiera Independencia vs. DXC Technology |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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