Correlation Between Martin Marietta and URBAN OUTFITTERS
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and URBAN OUTFITTERS 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 URBAN OUTFITTERS 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 URBAN OUTFITTERS, you can compare the effects of market volatilities on Martin Marietta and URBAN OUTFITTERS 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 URBAN OUTFITTERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and URBAN OUTFITTERS.
Diversification Opportunities for Martin Marietta and URBAN OUTFITTERS
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Martin and URBAN is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and URBAN OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on URBAN OUTFITTERS 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 URBAN OUTFITTERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of URBAN OUTFITTERS has no effect on the direction of Martin Marietta i.e., Martin Marietta and URBAN OUTFITTERS go up and down completely randomly.
Pair Corralation between Martin Marietta and URBAN OUTFITTERS
Assuming the 90 days horizon Martin Marietta Materials is expected to under-perform the URBAN OUTFITTERS. But the stock apears to be less risky and, when comparing its historical volatility, Martin Marietta Materials is 4.05 times less risky than URBAN OUTFITTERS. The stock trades about -0.28 of its potential returns per unit of risk. The URBAN OUTFITTERS is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,620 in URBAN OUTFITTERS on October 17, 2024 and sell it today you would earn a total of 1,780 from holding URBAN OUTFITTERS or generate 49.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. URBAN OUTFITTERS
Performance |
| Timeline |
| Martin Marietta Materials |
| URBAN OUTFITTERS |
Martin Marietta and URBAN OUTFITTERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and URBAN OUTFITTERS
The main advantage of trading using opposite Martin Marietta and URBAN OUTFITTERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, URBAN OUTFITTERS 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 URBAN OUTFITTERS will offset losses from the drop in URBAN OUTFITTERS's long position.| Martin Marietta vs. URBAN OUTFITTERS | Martin Marietta vs. Discover Financial Services | Martin Marietta vs. Webster Financial | Martin Marietta vs. DeVry Education Group |
| URBAN OUTFITTERS vs. Sims Metal Management | URBAN OUTFITTERS vs. The Japan Steel | URBAN OUTFITTERS vs. Xiwang Special Steel | URBAN OUTFITTERS vs. Sch Environnement SA |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |