Correlation Between Martin Marietta and Retail Estates
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Retail Estates 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 Retail Estates 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 Retail Estates NV, you can compare the effects of market volatilities on Martin Marietta and Retail Estates 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 Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Retail Estates.
Diversification Opportunities for Martin Marietta and Retail Estates
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Martin and Retail is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV 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 Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of Martin Marietta i.e., Martin Marietta and Retail Estates go up and down completely randomly.
Pair Corralation between Martin Marietta and Retail Estates
Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 1.45 times more return on investment than Retail Estates. However, Martin Marietta is 1.45 times more volatile than Retail Estates NV. It trades about 0.01 of its potential returns per unit of risk. Retail Estates NV is currently generating about -0.02 per unit of risk. If you would invest 55,489 in Martin Marietta Materials on September 3, 2024 and sell it today you would earn a total of 711.00 from holding Martin Marietta Materials or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. Retail Estates NV
Performance |
| Timeline |
| Martin Marietta Materials |
| Retail Estates NV |
Martin Marietta and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Retail Estates
The main advantage of trading using opposite Martin Marietta and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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