Correlation Between Martin Marietta and Glencore Plc
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Glencore Plc 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 Glencore Plc 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 Glencore plc, you can compare the effects of market volatilities on Martin Marietta and Glencore Plc 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 Glencore Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Glencore Plc.
Diversification Opportunities for Martin Marietta and Glencore Plc
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Martin and Glencore is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Glencore plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore plc 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 Glencore Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glencore plc has no effect on the direction of Martin Marietta i.e., Martin Marietta and Glencore Plc go up and down completely randomly.
Pair Corralation between Martin Marietta and Glencore Plc
Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 16.27 times more return on investment than Glencore Plc. However, Martin Marietta is 16.27 times more volatile than Glencore plc. It trades about 0.09 of its potential returns per unit of risk. Glencore plc is currently generating about 0.09 per unit of risk. If you would invest 989,192 in Martin Marietta Materials on September 5, 2024 and sell it today you would earn a total of 226,868 from holding Martin Marietta Materials or generate 22.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. Glencore plc
Performance |
| Timeline |
| Martin Marietta Materials |
| Glencore plc |
Martin Marietta and Glencore Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Glencore Plc
The main advantage of trading using opposite Martin Marietta and Glencore Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Glencore Plc 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 Glencore Plc will offset losses from the drop in Glencore Plc's long position.| Martin Marietta vs. DXC Technology | Martin Marietta vs. Grupo Sports World | Martin Marietta vs. Delta Air Lines | Martin Marietta vs. Lloyds Banking Group |
| Glencore Plc vs. Martin Marietta Materials | Glencore Plc vs. KB Home | Glencore Plc vs. Costco Wholesale | Glencore Plc vs. Verizon Communications |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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