Correlation Between Retail Estates and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Retail Estates 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 Retail Estates and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and Martin Marietta Materials, you can compare the effects of market volatilities on Retail Estates 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 Retail Estates with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Martin Marietta.
Diversification Opportunities for Retail Estates and Martin Marietta
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Retail and Martin is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV 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 Retail Estates 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 Retail Estates NV 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 Retail Estates i.e., Retail Estates and Martin Marietta go up and down completely randomly.
Pair Corralation between Retail Estates and Martin Marietta
Assuming the 90 days horizon Retail Estates NV is expected to under-perform the Martin Marietta. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates NV is 1.56 times less risky than Martin Marietta. The stock trades about -0.22 of its potential returns per unit of risk. The Martin Marietta Materials is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 54,700 in Martin Marietta Materials on September 1, 2024 and sell it today you would earn a total of 1,500 from holding Martin Marietta Materials or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates NV vs. Martin Marietta Materials
Performance |
| Timeline |
| Retail Estates NV |
| Martin Marietta Materials |
Retail Estates and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Martin Marietta
The main advantage of trading using opposite Retail Estates and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates 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.| Retail Estates vs. Superior Plus Corp | Retail Estates vs. NMI Holdings | Retail Estates vs. Origin Agritech | Retail Estates vs. SIVERS SEMICONDUCTORS AB |
| Martin Marietta vs. OAKTRSPECLENDNEW | Martin Marietta vs. REVO INSURANCE SPA | Martin Marietta vs. The Hanover Insurance | Martin Marietta vs. Reinsurance Group of |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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