Correlation Between Martin Marietta and PUBLIC STORAGE
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and PUBLIC STORAGE 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 PUBLIC STORAGE 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 PUBLIC STORAGE PRFO, you can compare the effects of market volatilities on Martin Marietta and PUBLIC STORAGE 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 PUBLIC STORAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and PUBLIC STORAGE.
Diversification Opportunities for Martin Marietta and PUBLIC STORAGE
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Martin and PUBLIC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and PUBLIC STORAGE PRFO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUBLIC STORAGE PRFO 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 PUBLIC STORAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUBLIC STORAGE PRFO has no effect on the direction of Martin Marietta i.e., Martin Marietta and PUBLIC STORAGE go up and down completely randomly.
Pair Corralation between Martin Marietta and PUBLIC STORAGE
Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 1.12 times more return on investment than PUBLIC STORAGE. However, Martin Marietta is 1.12 times more volatile than PUBLIC STORAGE PRFO. It trades about 0.19 of its potential returns per unit of risk. PUBLIC STORAGE PRFO is currently generating about -0.03 per unit of risk. If you would invest 53,440 in Martin Marietta Materials on August 29, 2024 and sell it today you would earn a total of 3,520 from holding Martin Marietta Materials or generate 6.59% 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. PUBLIC STORAGE PRFO
Performance |
| Timeline |
| Martin Marietta Materials |
| PUBLIC STORAGE PRFO |
Martin Marietta and PUBLIC STORAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and PUBLIC STORAGE
The main advantage of trading using opposite Martin Marietta and PUBLIC STORAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, PUBLIC STORAGE 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 PUBLIC STORAGE will offset losses from the drop in PUBLIC STORAGE's long position.| Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc |
| PUBLIC STORAGE vs. Xtrackers ShortDAX | PUBLIC STORAGE vs. Lyxor 1 | PUBLIC STORAGE vs. Xtrackers LevDAX | PUBLIC STORAGE vs. Superior Plus Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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