Correlation Between Martin Marietta and Grupo Sports
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Grupo Sports 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 Sports 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 Sports World, you can compare the effects of market volatilities on Martin Marietta and Grupo Sports 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 Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Grupo Sports.
Diversification Opportunities for Martin Marietta and Grupo Sports
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Martin and Grupo is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Grupo Sports World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Sports World 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 Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Sports World has no effect on the direction of Martin Marietta i.e., Martin Marietta and Grupo Sports go up and down completely randomly.
Pair Corralation between Martin Marietta and Grupo Sports
Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 0.72 times more return on investment than Grupo Sports. However, Martin Marietta Materials is 1.39 times less risky than Grupo Sports. It trades about 0.1 of its potential returns per unit of risk. Grupo Sports World is currently generating about 0.07 per unit of risk. If you would invest 733,998 in Martin Marietta Materials on August 28, 2024 and sell it today you would earn a total of 488,832 from holding Martin Marietta Materials or generate 66.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. Grupo Sports World
Performance |
| Timeline |
| Martin Marietta Materials |
| Grupo Sports World |
Martin Marietta and Grupo Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Grupo Sports
The main advantage of trading using opposite Martin Marietta and Grupo Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Grupo Sports 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 Sports will offset losses from the drop in Grupo Sports' long position.| Martin Marietta vs. Grupo Cementos de | Martin Marietta vs. The Select Sector | Martin Marietta vs. Promotora y Operadora | Martin Marietta vs. iShares Global Timber |
| Grupo Sports vs. New Oriental Education | Grupo Sports vs. Ameriprise Financial | Grupo Sports vs. GMxico Transportes SAB | Grupo Sports vs. First Republic Bank |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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