Correlation Between Secure Property and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Secure Property 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 Secure Property and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Secure Property Development and Martin Marietta Materials, you can compare the effects of market volatilities on Secure Property 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 Secure Property with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secure Property and Martin Marietta.
Diversification Opportunities for Secure Property and Martin Marietta
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Secure and Martin is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Secure Property Development 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 Secure Property 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 Secure Property Development 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 Secure Property i.e., Secure Property and Martin Marietta go up and down completely randomly.
Pair Corralation between Secure Property and Martin Marietta
Assuming the 90 days trading horizon Secure Property Development is expected to under-perform the Martin Marietta. In addition to that, Secure Property is 1.03 times more volatile than Martin Marietta Materials. It trades about -0.03 of its total potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.06 per unit of volatility. If you would invest 42,295 in Martin Marietta Materials on September 12, 2024 and sell it today you would earn a total of 15,396 from holding Martin Marietta Materials or generate 36.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.16% |
| Values | Daily Returns |
Secure Property Development vs. Martin Marietta Materials
Performance |
| Timeline |
| Secure Property Deve |
| Martin Marietta Materials |
Secure Property and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Secure Property and Martin Marietta
The main advantage of trading using opposite Secure Property and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Secure Property 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.| Secure Property vs. Grand Vision Media | Secure Property vs. One Media iP | Secure Property vs. Catena Media PLC | Secure Property vs. EVS Broadcast Equipment |
| Martin Marietta vs. Hong Kong Land | Martin Marietta vs. Neometals | Martin Marietta vs. Coor Service Management | Martin Marietta vs. Fidelity Sustainable USD |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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