Correlation Between Martin Marietta and Eskay Mining
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Eskay Mining 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 Eskay Mining 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 Eskay Mining Corp, you can compare the effects of market volatilities on Martin Marietta and Eskay Mining 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 Eskay Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Eskay Mining.
Diversification Opportunities for Martin Marietta and Eskay Mining
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Martin and Eskay is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Eskay Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eskay Mining Corp 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 Eskay Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eskay Mining Corp has no effect on the direction of Martin Marietta i.e., Martin Marietta and Eskay Mining go up and down completely randomly.
Pair Corralation between Martin Marietta and Eskay Mining
Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 0.25 times more return on investment than Eskay Mining. However, Martin Marietta Materials is 4.02 times less risky than Eskay Mining. It trades about 0.07 of its potential returns per unit of risk. Eskay Mining Corp is currently generating about -0.03 per unit of risk. If you would invest 31,190 in Martin Marietta Materials on October 15, 2024 and sell it today you would earn a total of 18,480 from holding Martin Marietta Materials or generate 59.25% 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. Eskay Mining Corp
Performance |
| Timeline |
| Martin Marietta Materials |
| Eskay Mining Corp |
Martin Marietta and Eskay Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Eskay Mining
The main advantage of trading using opposite Martin Marietta and Eskay Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Eskay Mining 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 Eskay Mining will offset losses from the drop in Eskay Mining's long position.| Martin Marietta vs. ANTA SPORTS PRODUCT | Martin Marietta vs. Minerals Technologies | Martin Marietta vs. THORNEY TECHS LTD | Martin Marietta vs. Seven West Media |
| Eskay Mining vs. FIREWEED METALS P | Eskay Mining vs. YATRA ONLINE DL 0001 | Eskay Mining vs. SALESFORCE INC CDR | Eskay Mining vs. Fortescue Metals Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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