Correlation Between Martin Marietta and STONE ENERGY
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and STONE ENERGY 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 STONE ENERGY 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 STONE ENERGY, you can compare the effects of market volatilities on Martin Marietta and STONE ENERGY 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 STONE ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and STONE ENERGY.
Diversification Opportunities for Martin Marietta and STONE ENERGY
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Martin and STONE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and STONE ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STONE ENERGY 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 STONE ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STONE ENERGY has no effect on the direction of Martin Marietta i.e., Martin Marietta and STONE ENERGY go up and down completely randomly.
Pair Corralation between Martin Marietta and STONE ENERGY
If you would invest 31,318 in Martin Marietta Materials on October 12, 2024 and sell it today you would earn a total of 18,352 from holding Martin Marietta Materials or generate 58.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. STONE ENERGY
Performance |
| Timeline |
| Martin Marietta Materials |
| STONE ENERGY |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Martin Marietta and STONE ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and STONE ENERGY
The main advantage of trading using opposite Martin Marietta and STONE ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, STONE ENERGY 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 STONE ENERGY will offset losses from the drop in STONE ENERGY's long position.| Martin Marietta vs. BOS BETTER ONLINE | Martin Marietta vs. PACIFIC ONLINE | Martin Marietta vs. UPDATE SOFTWARE | Martin Marietta vs. Constellation Software |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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