Correlation Between Martin Marietta and G III
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and G III 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 G III 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 G III Apparel Group, you can compare the effects of market volatilities on Martin Marietta and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and G III.
Diversification Opportunities for Martin Marietta and G III
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Martin and GI4 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of Martin Marietta i.e., Martin Marietta and G III go up and down completely randomly.
Pair Corralation between Martin Marietta and G III
Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 0.49 times more return on investment than G III. However, Martin Marietta Materials is 2.05 times less risky than G III. It trades about 0.14 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.12 per unit of risk. If you would invest 50,060 in Martin Marietta Materials on November 7, 2024 and sell it today you would earn a total of 1,740 from holding Martin Marietta Materials or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. G III Apparel Group
Performance |
| Timeline |
| Martin Marietta Materials |
| G III Apparel |
Martin Marietta and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and G III
The main advantage of trading using opposite Martin Marietta and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, G III 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 G III will offset losses from the drop in G III's long position.| Martin Marietta vs. INTER CARS SA | Martin Marietta vs. Grupo Carso SAB | Martin Marietta vs. Casio Computer CoLtd | Martin Marietta vs. Align Technology |
| G III vs. Perseus Mining Limited | G III vs. DISTRICT METALS | G III vs. REVO INSURANCE SPA | G III vs. Harmony Gold 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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