Correlation Between SPARTAN STORES and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES 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 SPARTAN STORES and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and Martin Marietta Materials, you can compare the effects of market volatilities on SPARTAN STORES 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 SPARTAN STORES with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and Martin Marietta.
Diversification Opportunities for SPARTAN STORES and Martin Marietta
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPARTAN and Martin is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES i.e., SPARTAN STORES and Martin Marietta go up and down completely randomly.
Pair Corralation between SPARTAN STORES and Martin Marietta
Assuming the 90 days trading horizon SPARTAN STORES is expected to under-perform the Martin Marietta. In addition to that, SPARTAN STORES is 2.25 times more volatile than Martin Marietta Materials. It trades about -0.1 of its total potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.16 per unit of volatility. If you would invest 53,380 in Martin Marietta Materials on September 3, 2024 and sell it today you would earn a total of 2,820 from holding Martin Marietta Materials or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPARTAN STORES vs. Martin Marietta Materials
Performance |
| Timeline |
| SPARTAN STORES |
| Martin Marietta Materials |
SPARTAN STORES and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and Martin Marietta
The main advantage of trading using opposite SPARTAN STORES and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES 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.| SPARTAN STORES vs. Playa Hotels Resorts | SPARTAN STORES vs. TYSON FOODS A | SPARTAN STORES vs. Host Hotels Resorts | SPARTAN STORES vs. Pebblebrook Hotel Trust |
| Martin Marietta vs. SBI Insurance Group | Martin Marietta vs. Ping An Insurance | Martin Marietta vs. ScanSource | 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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