Correlation Between Martin Marietta and OAKTRSPECLENDNEW
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW, you can compare the effects of market volatilities on Martin Marietta and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and OAKTRSPECLENDNEW.
Diversification Opportunities for Martin Marietta and OAKTRSPECLENDNEW
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Martin and OAKTRSPECLENDNEW is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and OAKTRSPECLENDNEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKTRSPECLENDNEW has no effect on the direction of Martin Marietta i.e., Martin Marietta and OAKTRSPECLENDNEW go up and down completely randomly.
Pair Corralation between Martin Marietta and OAKTRSPECLENDNEW
Assuming the 90 days trading horizon Martin Marietta is expected to generate 1.16 times less return on investment than OAKTRSPECLENDNEW. But when comparing it to its historical volatility, Martin Marietta Materials is 1.1 times less risky than OAKTRSPECLENDNEW. It trades about 0.16 of its potential returns per unit of risk. OAKTRSPECLENDNEW is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,438 in OAKTRSPECLENDNEW on September 3, 2024 and sell it today you would earn a total of 88.00 from holding OAKTRSPECLENDNEW or generate 6.12% 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. OAKTRSPECLENDNEW
Performance |
| Timeline |
| Martin Marietta Materials |
| OAKTRSPECLENDNEW |
Martin Marietta and OAKTRSPECLENDNEW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and OAKTRSPECLENDNEW
The main advantage of trading using opposite Martin Marietta and OAKTRSPECLENDNEW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW will offset losses from the drop in OAKTRSPECLENDNEW's long position.| Martin Marietta vs. SBI Insurance Group | Martin Marietta vs. Ping An Insurance | Martin Marietta vs. ScanSource | Martin Marietta vs. Reinsurance Group of |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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