Correlation Between Martin Marietta and Townsquare Media
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Townsquare Media 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 Townsquare Media 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 Townsquare Media, you can compare the effects of market volatilities on Martin Marietta and Townsquare Media 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 Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Townsquare Media.
Diversification Opportunities for Martin Marietta and Townsquare Media
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Martin and Townsquare is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media 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 Townsquare Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Townsquare Media has no effect on the direction of Martin Marietta i.e., Martin Marietta and Townsquare Media go up and down completely randomly.
Pair Corralation between Martin Marietta and Townsquare Media
Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 0.47 times more return on investment than Townsquare Media. However, Martin Marietta Materials is 2.12 times less risky than Townsquare Media. It trades about 0.14 of its potential returns per unit of risk. Townsquare Media is currently generating about 0.0 per unit of risk. If you would invest 50,540 in Martin Marietta Materials on October 31, 2024 and sell it today you would earn a total of 1,660 from holding Martin Marietta Materials or generate 3.28% 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. Townsquare Media
Performance |
| Timeline |
| Martin Marietta Materials |
| Townsquare Media |
Martin Marietta and Townsquare Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Townsquare Media
The main advantage of trading using opposite Martin Marietta and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Townsquare Media 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 Townsquare Media will offset losses from the drop in Townsquare Media's long position.| Martin Marietta vs. Gaztransport Technigaz SA | Martin Marietta vs. Kingdee International Software | Martin Marietta vs. TITANIUM TRANSPORTGROUP | Martin Marietta vs. USWE SPORTS AB |
| Townsquare Media vs. FAST RETAIL ADR | Townsquare Media vs. National Retail Properties | Townsquare Media vs. Apollo Investment Corp | Townsquare Media vs. Japan Asia Investment |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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