Correlation Between Qingling Motors and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Qingling Motors 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 Qingling Motors and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qingling Motors Co and Martin Marietta Materials, you can compare the effects of market volatilities on Qingling Motors 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 Qingling Motors with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingling Motors and Martin Marietta.
Diversification Opportunities for Qingling Motors and Martin Marietta
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Qingling and Martin is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Qingling Motors Co 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 Qingling Motors 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 Qingling Motors Co 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 Qingling Motors i.e., Qingling Motors and Martin Marietta go up and down completely randomly.
Pair Corralation between Qingling Motors and Martin Marietta
Assuming the 90 days horizon Qingling Motors Co is expected to generate 2.45 times more return on investment than Martin Marietta. However, Qingling Motors is 2.45 times more volatile than Martin Marietta Materials. It trades about 0.24 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about -0.27 per unit of risk. If you would invest 5.60 in Qingling Motors Co on September 15, 2024 and sell it today you would earn a total of 0.76 from holding Qingling Motors Co or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingling Motors Co vs. Martin Marietta Materials
Performance |
| Timeline |
| Qingling Motors |
| Martin Marietta Materials |
Qingling Motors and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingling Motors and Martin Marietta
The main advantage of trading using opposite Qingling Motors and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingling Motors 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.| Qingling Motors vs. Heidelberg Materials AG | Qingling Motors vs. Host Hotels Resorts | Qingling Motors vs. Compagnie Plastic Omnium | Qingling Motors vs. INTERCONT HOTELS |
| Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc | Martin Marietta vs. Apple Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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