Correlation Between Martin Marietta and CEMATRIX
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and CEMATRIX 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 CEMATRIX 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 CEMATRIX, you can compare the effects of market volatilities on Martin Marietta and CEMATRIX 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 CEMATRIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and CEMATRIX.
Diversification Opportunities for Martin Marietta and CEMATRIX
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Martin and CEMATRIX is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and CEMATRIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEMATRIX 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 CEMATRIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEMATRIX has no effect on the direction of Martin Marietta i.e., Martin Marietta and CEMATRIX go up and down completely randomly.
Pair Corralation between Martin Marietta and CEMATRIX
Considering the 90-day investment horizon Martin Marietta Materials is expected to generate 0.3 times more return on investment than CEMATRIX. However, Martin Marietta Materials is 3.38 times less risky than CEMATRIX. It trades about 0.04 of its potential returns per unit of risk. CEMATRIX is currently generating about 0.0 per unit of risk. If you would invest 46,922 in Martin Marietta Materials on November 5, 2024 and sell it today you would earn a total of 7,490 from holding Martin Marietta Materials or generate 15.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. CEMATRIX
Performance |
| Timeline |
| Martin Marietta Materials |
| CEMATRIX |
Martin Marietta and CEMATRIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and CEMATRIX
The main advantage of trading using opposite Martin Marietta and CEMATRIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, CEMATRIX 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 CEMATRIX will offset losses from the drop in CEMATRIX's long position.| Martin Marietta vs. CRH PLC ADR | Martin Marietta vs. Eagle Materials | Martin Marietta vs. Summit Materials | Martin Marietta vs. United States Lime |
| CEMATRIX vs. Tecnoglass | CEMATRIX vs. Xinyi Glass Holdings | CEMATRIX vs. Anhui Conch Cement | CEMATRIX vs. Basanite |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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