Correlation Between Martin Marietta and Lerøy Seafood
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Lerøy Seafood 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 Lerøy Seafood 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 Lery Seafood Group, you can compare the effects of market volatilities on Martin Marietta and Lerøy Seafood 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 Lerøy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Lerøy Seafood.
Diversification Opportunities for Martin Marietta and Lerøy Seafood
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Martin and Lerøy is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group 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 Lerøy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of Martin Marietta i.e., Martin Marietta and Lerøy Seafood go up and down completely randomly.
Pair Corralation between Martin Marietta and Lerøy Seafood
Assuming the 90 days trading horizon Martin Marietta is expected to generate 6.51 times less return on investment than Lerøy Seafood. But when comparing it to its historical volatility, Martin Marietta Materials is 5.6 times less risky than Lerøy Seafood. It trades about 0.06 of its potential returns per unit of risk. Lery Seafood Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 75.00 in Lery Seafood Group on December 4, 2024 and sell it today you would earn a total of 356.00 from holding Lery Seafood Group or generate 474.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Martin Marietta Materials vs. Lery Seafood Group
Performance |
| Timeline |
| Martin Marietta Materials |
| Lery Seafood Group |
Martin Marietta and Lerøy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and Lerøy Seafood
The main advantage of trading using opposite Martin Marietta and Lerøy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Lerøy Seafood 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 Lerøy Seafood will offset losses from the drop in Lerøy Seafood's long position.| Martin Marietta vs. OAKTRSPECLENDNEW | Martin Marietta vs. JSC Halyk bank | Martin Marietta vs. Virtu Financial | Martin Marietta vs. GRUPO CARSO A1 |
| Lerøy Seafood vs. Mowi ASA | Lerøy Seafood vs. LEROY SEAFOOD GRUNSPADR | Lerøy Seafood vs. Yihai International Holding | Lerøy Seafood vs. Lery Seafood 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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