Correlation Between Martin Marietta and First Majestic
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and First Majestic 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 First Majestic 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 First Majestic Silver, you can compare the effects of market volatilities on Martin Marietta and First Majestic 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 First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and First Majestic.
Diversification Opportunities for Martin Marietta and First Majestic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Martin and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver 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 First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of Martin Marietta i.e., Martin Marietta and First Majestic go up and down completely randomly.
Pair Corralation between Martin Marietta and First Majestic
Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 1.84 times more return on investment than First Majestic. However, Martin Marietta is 1.84 times more volatile than First Majestic Silver. It trades about 0.01 of its potential returns per unit of risk. First Majestic Silver is currently generating about -0.28 per unit of risk. If you would invest 1,212,089 in Martin Marietta Materials on August 31, 2024 and sell it today you would earn a total of 411.00 from holding Martin Marietta Materials or generate 0.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. First Majestic Silver
Performance |
| Timeline |
| Martin Marietta Materials |
| First Majestic Silver |
Martin Marietta and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and First Majestic
The main advantage of trading using opposite Martin Marietta and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.| Martin Marietta vs. TopBuild Corp | Martin Marietta vs. CEMEX SAB de | Martin Marietta vs. Grupo Cementos de | Martin Marietta vs. Grupo Lamosa SAB |
| First Majestic vs. Visa Inc | First Majestic vs. Desarrolladora Homex SAB | First Majestic vs. Tesla Inc | First Majestic vs. CMR SAB de |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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