Correlation Between SOLSTAD OFFSHORE and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOLSTAD OFFSHORE NK and Martin Marietta Materials, you can compare the effects of market volatilities on SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLSTAD OFFSHORE and Martin Marietta.
Diversification Opportunities for SOLSTAD OFFSHORE and Martin Marietta
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOLSTAD and Martin is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SOLSTAD OFFSHORE NK 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 SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE NK 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 SOLSTAD OFFSHORE i.e., SOLSTAD OFFSHORE and Martin Marietta go up and down completely randomly.
Pair Corralation between SOLSTAD OFFSHORE and Martin Marietta
Assuming the 90 days horizon SOLSTAD OFFSHORE NK is expected to generate 2.15 times more return on investment than Martin Marietta. However, SOLSTAD OFFSHORE is 2.15 times more volatile than Martin Marietta Materials. It trades about -0.03 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about -0.16 per unit of risk. If you would invest 360.00 in SOLSTAD OFFSHORE NK on October 28, 2024 and sell it today you would lose (14.00) from holding SOLSTAD OFFSHORE NK or give up 3.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOLSTAD OFFSHORE NK vs. Martin Marietta Materials
Performance |
| Timeline |
| SOLSTAD OFFSHORE |
| Martin Marietta Materials |
SOLSTAD OFFSHORE and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOLSTAD OFFSHORE and Martin Marietta
The main advantage of trading using opposite SOLSTAD OFFSHORE and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLSTAD OFFSHORE 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.| SOLSTAD OFFSHORE vs. TIANDE CHEMICAL | SOLSTAD OFFSHORE vs. Nordic Semiconductor ASA | SOLSTAD OFFSHORE vs. Silicon Motion Technology | SOLSTAD OFFSHORE vs. Mitsubishi Gas Chemical |
| Martin Marietta vs. Digilife Technologies Limited | Martin Marietta vs. Addtech AB | Martin Marietta vs. THORNEY TECHS LTD | Martin Marietta vs. Carsales |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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