Correlation Between Martin Marietta and Hyundai
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Hyundai 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 Hyundai 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 Hyundai Motor, you can compare the effects of market volatilities on Martin Marietta and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Hyundai.
Diversification Opportunities for Martin Marietta and Hyundai
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Martin and Hyundai is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of Martin Marietta i.e., Martin Marietta and Hyundai go up and down completely randomly.
Pair Corralation between Martin Marietta and Hyundai
Assuming the 90 days trading horizon Martin Marietta Materials is expected to under-perform the Hyundai. But the stock apears to be less risky and, when comparing its historical volatility, Martin Marietta Materials is 2.07 times less risky than Hyundai. The stock trades about -0.29 of its potential returns per unit of risk. The Hyundai Motor is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,890 in Hyundai Motor on September 14, 2024 and sell it today you would lose (60.00) from holding Hyundai Motor or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. Hyundai Motor
Performance |
| Timeline |
| Martin Marietta Materials |
| Hyundai Motor |
Martin Marietta and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Hyundai
The main advantage of trading using opposite Martin Marietta and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc |
| Hyundai vs. GOODYEAR T RUBBER | Hyundai vs. Fair Isaac Corp | Hyundai vs. Martin Marietta Materials | Hyundai vs. Vulcan Materials |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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