Correlation Between Digilife Technologies and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Digilife 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 Digilife 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 Digilife Technologies Limited and Martin Marietta Materials, you can compare the effects of market volatilities on Digilife 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 Digilife Technologies with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digilife Technologies and Martin Marietta.
Diversification Opportunities for Digilife Technologies and Martin Marietta
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Digilife and Martin is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited 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 Digilife 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 Digilife Technologies Limited 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 Digilife Technologies i.e., Digilife Technologies and Martin Marietta go up and down completely randomly.
Pair Corralation between Digilife Technologies and Martin Marietta
Assuming the 90 days trading horizon Digilife Technologies Limited is expected to under-perform the Martin Marietta. In addition to that, Digilife Technologies is 4.24 times more volatile than Martin Marietta Materials. It trades about -0.07 of its total potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.18 per unit of volatility. If you would invest 50,060 in Martin Marietta Materials on November 6, 2024 and sell it today you would earn a total of 2,220 from holding Martin Marietta Materials or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Digilife Technologies Limited vs. Martin Marietta Materials
Performance |
| Timeline |
| Digilife Technologies |
| Martin Marietta Materials |
Digilife Technologies and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digilife Technologies and Martin Marietta
The main advantage of trading using opposite Digilife Technologies and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digilife 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.| Digilife Technologies vs. The Yokohama Rubber | Digilife Technologies vs. Summit Materials | Digilife Technologies vs. GAMING FAC SA | Digilife Technologies vs. Heidelberg Materials AG |
| Martin Marietta vs. INTER CARS SA | Martin Marietta vs. Grupo Carso SAB | Martin Marietta vs. Casio Computer CoLtd | Martin Marietta vs. Align Technology |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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