Correlation Between Martin Marietta and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and MEDICAL FACILITIES 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 MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on Martin Marietta and MEDICAL FACILITIES 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 MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and MEDICAL FACILITIES.
Diversification Opportunities for Martin Marietta and MEDICAL FACILITIES
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Martin and MEDICAL is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW 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 MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of Martin Marietta i.e., Martin Marietta and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between Martin Marietta and MEDICAL FACILITIES
Assuming the 90 days trading horizon Martin Marietta is expected to generate 3.76 times less return on investment than MEDICAL FACILITIES. But when comparing it to its historical volatility, Martin Marietta Materials is 1.48 times less risky than MEDICAL FACILITIES. It trades about 0.03 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 888.00 in MEDICAL FACILITIES NEW on November 3, 2024 and sell it today you would earn a total of 192.00 from holding MEDICAL FACILITIES NEW or generate 21.62% 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. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| Martin Marietta Materials |
| MEDICAL FACILITIES NEW |
Martin Marietta and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and MEDICAL FACILITIES
The main advantage of trading using opposite Martin Marietta and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| Martin Marietta vs. SIVERS SEMICONDUCTORS AB | Martin Marietta vs. NorAm Drilling AS | Martin Marietta vs. Volkswagen AG | Martin Marietta vs. Darden Restaurants |
| MEDICAL FACILITIES vs. DISTRICT METALS | MEDICAL FACILITIES vs. MAGNUM MINING EXP | MEDICAL FACILITIES vs. National Retail Properties | MEDICAL FACILITIES vs. De Grey Mining |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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