Correlation Between Martin Marietta and INVEX Controladora
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and INVEX Controladora 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 INVEX Controladora 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 INVEX Controladora SAB, you can compare the effects of market volatilities on Martin Marietta and INVEX Controladora 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 INVEX Controladora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and INVEX Controladora.
Diversification Opportunities for Martin Marietta and INVEX Controladora
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Martin and INVEX is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and INVEX Controladora SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVEX Controladora SAB 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 INVEX Controladora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVEX Controladora SAB has no effect on the direction of Martin Marietta i.e., Martin Marietta and INVEX Controladora go up and down completely randomly.
Pair Corralation between Martin Marietta and INVEX Controladora
Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 4.98 times more return on investment than INVEX Controladora. However, Martin Marietta is 4.98 times more volatile than INVEX Controladora SAB. It trades about 0.08 of its potential returns per unit of risk. INVEX Controladora SAB is currently generating about 0.02 per unit of risk. If you would invest 1,008,991 in Martin Marietta Materials on September 3, 2024 and sell it today you would earn a total of 207,069 from holding Martin Marietta Materials or generate 20.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. INVEX Controladora SAB
Performance |
| Timeline |
| Martin Marietta Materials |
| INVEX Controladora SAB |
Martin Marietta and INVEX Controladora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and INVEX Controladora
The main advantage of trading using opposite Martin Marietta and INVEX Controladora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, INVEX Controladora 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 INVEX Controladora will offset losses from the drop in INVEX Controladora's long position.| Martin Marietta vs. TopBuild Corp | Martin Marietta vs. CEMEX SAB de | Martin Marietta vs. Grupo Lamosa SAB | Martin Marietta vs. Internacional de Cermica |
| INVEX Controladora vs. Martin Marietta Materials | INVEX Controladora vs. KB Home | INVEX Controladora vs. United States Steel | INVEX Controladora vs. Grupo Sports World |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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