Correlation Between Minerals Technologies and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Minerals Technologies and Martin Marietta 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 Minerals Technologies and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minerals Technologies and Martin Marietta Materials, you can compare the effects of market volatilities on Minerals Technologies and Martin Marietta 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 Minerals Technologies with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minerals Technologies and Martin Marietta.
Diversification Opportunities for Minerals Technologies and Martin Marietta
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Minerals and Martin is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies and Martin Marietta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Marietta Materials and Minerals Technologies 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 Minerals Technologies are associated (or correlated) with Martin Marietta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Marietta Materials has no effect on the direction of Minerals Technologies i.e., Minerals Technologies and Martin Marietta go up and down completely randomly.
Pair Corralation between Minerals Technologies and Martin Marietta
Assuming the 90 days horizon Minerals Technologies is expected to under-perform the Martin Marietta. In addition to that, Minerals Technologies is 1.41 times more volatile than Martin Marietta Materials. It trades about -0.2 of its total potential returns per unit of risk. Martin Marietta Materials is currently generating about -0.25 per unit of volatility. If you would invest 52,060 in Martin Marietta Materials on October 16, 2024 and sell it today you would lose (2,180) from holding Martin Marietta Materials or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minerals Technologies vs. Martin Marietta Materials
Performance |
| Timeline |
| Minerals Technologies |
| Martin Marietta Materials |
Minerals Technologies and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minerals Technologies and Martin Marietta
The main advantage of trading using opposite Minerals Technologies and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies position performs unexpectedly, Martin Marietta 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 Martin Marietta will offset losses from the drop in Martin Marietta's long position.| Minerals Technologies vs. Geely Automobile Holdings | Minerals Technologies vs. Virtus Investment Partners | Minerals Technologies vs. Methode Electronics | Minerals Technologies vs. ELECTRONIC ARTS |
| Martin Marietta vs. ANTA SPORTS PRODUCT | Martin Marietta vs. Minerals Technologies | Martin Marietta vs. THORNEY TECHS LTD | Martin Marietta vs. Seven West Media |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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