Correlation Between Martin Marietta and Grupo Lamosa
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Grupo Lamosa 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 Grupo Lamosa 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 Grupo Lamosa SAB, you can compare the effects of market volatilities on Martin Marietta and Grupo Lamosa 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 Grupo Lamosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Grupo Lamosa.
Diversification Opportunities for Martin Marietta and Grupo Lamosa
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Martin and Grupo is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Grupo Lamosa SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Lamosa 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 Grupo Lamosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Lamosa SAB has no effect on the direction of Martin Marietta i.e., Martin Marietta and Grupo Lamosa go up and down completely randomly.
Pair Corralation between Martin Marietta and Grupo Lamosa
Assuming the 90 days trading horizon Martin Marietta Materials is expected to under-perform the Grupo Lamosa. But the stock apears to be less risky and, when comparing its historical volatility, Martin Marietta Materials is 1.05 times less risky than Grupo Lamosa. The stock trades about -0.13 of its potential returns per unit of risk. The Grupo Lamosa SAB is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 11,500 in Grupo Lamosa SAB on November 27, 2024 and sell it today you would lose (230.00) from holding Grupo Lamosa SAB or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. Grupo Lamosa SAB
Performance |
| Timeline |
| Martin Marietta Materials |
| Grupo Lamosa SAB |
Martin Marietta and Grupo Lamosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Grupo Lamosa
The main advantage of trading using opposite Martin Marietta and Grupo Lamosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Grupo Lamosa 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 Grupo Lamosa will offset losses from the drop in Grupo Lamosa's long position.| Martin Marietta vs. Steel Dynamics | Martin Marietta vs. First Majestic Silver | Martin Marietta vs. CVS Health | Martin Marietta vs. McEwen Mining |
| Grupo Lamosa vs. Monster Beverage Corp | Grupo Lamosa vs. Applied Materials | Grupo Lamosa vs. Southwest Airlines | Grupo Lamosa vs. Steel Dynamics |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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