Correlation Between ReTo Eco and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both ReTo Eco 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 ReTo Eco and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ReTo Eco Solutions and Martin Marietta Materials, you can compare the effects of market volatilities on ReTo Eco 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 ReTo Eco with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of ReTo Eco and Martin Marietta.
Diversification Opportunities for ReTo Eco and Martin Marietta
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ReTo and Martin is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding ReTo Eco Solutions 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 ReTo Eco 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 ReTo Eco Solutions 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 ReTo Eco i.e., ReTo Eco and Martin Marietta go up and down completely randomly.
Pair Corralation between ReTo Eco and Martin Marietta
Given the investment horizon of 90 days ReTo Eco Solutions is expected to under-perform the Martin Marietta. In addition to that, ReTo Eco is 2.51 times more volatile than Martin Marietta Materials. It trades about -0.15 of its total potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.13 per unit of volatility. If you would invest 56,095 in Martin Marietta Materials on August 23, 2024 and sell it today you would earn a total of 2,999 from holding Martin Marietta Materials or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ReTo Eco Solutions vs. Martin Marietta Materials
Performance |
| Timeline |
| ReTo Eco Solutions |
| Martin Marietta Materials |
ReTo Eco and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ReTo Eco and Martin Marietta
The main advantage of trading using opposite ReTo Eco and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReTo Eco 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.| ReTo Eco vs. Martin Marietta Materials | ReTo Eco vs. Vulcan Materials | ReTo Eco vs. Summit Materials | ReTo Eco vs. United States Lime |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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