Correlation Between Martin Marietta and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Evolution 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 Evolution 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 Evolution Mining Limited, you can compare the effects of market volatilities on Martin Marietta and Evolution 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 Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Evolution Mining.
Diversification Opportunities for Martin Marietta and Evolution Mining
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Martin and Evolution is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Evolution Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Martin Marietta i.e., Martin Marietta and Evolution Mining go up and down completely randomly.
Pair Corralation between Martin Marietta and Evolution Mining
Assuming the 90 days trading horizon Martin Marietta is expected to generate 1.26 times less return on investment than Evolution Mining. But when comparing it to its historical volatility, Martin Marietta Materials is 1.81 times less risky than Evolution Mining. It trades about 0.08 of its potential returns per unit of risk. Evolution Mining Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 173.00 in Evolution Mining Limited on August 24, 2024 and sell it today you would earn a total of 124.00 from holding Evolution Mining Limited or generate 71.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. Evolution Mining Limited
Performance |
| Timeline |
| Martin Marietta Materials |
| Evolution Mining |
Martin Marietta and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Evolution Mining
The main advantage of trading using opposite Martin Marietta and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Evolution 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 Evolution Mining will offset losses from the drop in Evolution Mining's long position.| Martin Marietta vs. Mitsui Chemicals | Martin Marietta vs. OFFICE DEPOT | Martin Marietta vs. Quaker Chemical | Martin Marietta vs. Sekisui Chemical Co |
| Evolution Mining vs. Gladstone Investment | Evolution Mining vs. Compagnie Plastic Omnium | Evolution Mining vs. Materialise NV | Evolution Mining vs. Martin Marietta 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |