Correlation Between NYSE Composite and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Martin Marietta Materials, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Martin Marietta.
Diversification Opportunities for NYSE Composite and Martin Marietta
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Martin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Martin Marietta go up and down completely randomly.
Pair Corralation between NYSE Composite and Martin Marietta
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.26 times less return on investment than Martin Marietta. But when comparing it to its historical volatility, NYSE Composite is 1.78 times less risky than Martin Marietta. It trades about 0.42 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 51,056 in Martin Marietta Materials on November 2, 2024 and sell it today you would earn a total of 3,577 from holding Martin Marietta Materials or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Martin Marietta Materials
Performance |
| Timeline |
NYSE Composite and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Martin Marietta Materials
Pair trading matchups for Martin Marietta
Pair Trading with NYSE Composite and Martin Marietta
The main advantage of trading using opposite NYSE Composite and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Western Copper and | NYSE Composite vs. Chemours Co | NYSE Composite vs. IPG Photonics | NYSE Composite vs. Morgan Advanced Materials |
| Martin Marietta vs. CRH PLC ADR | Martin Marietta vs. Eagle Materials | Martin Marietta vs. Summit Materials | Martin Marietta vs. United States Lime |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |