Correlation Between Martin Marietta and PT Semen
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and PT Semen 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 PT Semen 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 PT Semen Indonesia, you can compare the effects of market volatilities on Martin Marietta and PT Semen 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 PT Semen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and PT Semen.
Diversification Opportunities for Martin Marietta and PT Semen
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Martin and PSGTF is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and PT Semen Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Semen Indonesia 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 PT Semen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Semen Indonesia has no effect on the direction of Martin Marietta i.e., Martin Marietta and PT Semen go up and down completely randomly.
Pair Corralation between Martin Marietta and PT Semen
Considering the 90-day investment horizon Martin Marietta Materials is expected to generate 0.39 times more return on investment than PT Semen. However, Martin Marietta Materials is 2.59 times less risky than PT Semen. It trades about -0.38 of its potential returns per unit of risk. PT Semen Indonesia is currently generating about -0.22 per unit of risk. If you would invest 60,599 in Martin Marietta Materials on September 13, 2024 and sell it today you would lose (4,785) from holding Martin Marietta Materials or give up 7.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Martin Marietta Materials vs. PT Semen Indonesia
Performance |
| Timeline |
| Martin Marietta Materials |
| PT Semen Indonesia |
Martin Marietta and PT Semen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and PT Semen
The main advantage of trading using opposite Martin Marietta and PT Semen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, PT Semen 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 PT Semen will offset losses from the drop in PT Semen'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 |
| PT Semen vs. CRH PLC ADR | PT Semen vs. Holcim | PT Semen vs. Lafargeholcim Ltd ADR | PT Semen vs. Vulcan Materials |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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