Correlation Between Martin Marietta and CanSino Biologics
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and CanSino Biologics 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 CanSino Biologics 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 CanSino Biologics, you can compare the effects of market volatilities on Martin Marietta and CanSino Biologics 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 CanSino Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and CanSino Biologics.
Diversification Opportunities for Martin Marietta and CanSino Biologics
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Martin and CanSino is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and CanSino Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanSino Biologics 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 CanSino Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanSino Biologics has no effect on the direction of Martin Marietta i.e., Martin Marietta and CanSino Biologics go up and down completely randomly.
Pair Corralation between Martin Marietta and CanSino Biologics
Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 0.36 times more return on investment than CanSino Biologics. However, Martin Marietta Materials is 2.75 times less risky than CanSino Biologics. It trades about -0.28 of its potential returns per unit of risk. CanSino Biologics is currently generating about -0.23 per unit of risk. If you would invest 52,060 in Martin Marietta Materials on October 15, 2024 and sell it today you would lose (2,390) from holding Martin Marietta Materials or give up 4.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. CanSino Biologics
Performance |
| Timeline |
| Martin Marietta Materials |
| CanSino Biologics |
Martin Marietta and CanSino Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and CanSino Biologics
The main advantage of trading using opposite Martin Marietta and CanSino Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, CanSino Biologics 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 CanSino Biologics will offset losses from the drop in CanSino Biologics' long position.| Martin Marietta vs. Fevertree Drinks PLC | Martin Marietta vs. Monster Beverage Corp | Martin Marietta vs. SOLSTAD OFFSHORE NK | Martin Marietta vs. Teradata Corp |
| CanSino Biologics vs. NEWELL RUBBERMAID | CanSino Biologics vs. Martin Marietta Materials | CanSino Biologics vs. Telecom Argentina SA | CanSino Biologics vs. Compagnie Plastic Omnium |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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