Correlation Between UBS Group and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both UBS Group 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 UBS Group and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS Group AG and Martin Marietta Materials, you can compare the effects of market volatilities on UBS Group 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 UBS Group with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Group and Martin Marietta.
Diversification Opportunities for UBS Group and Martin Marietta
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between UBS and Martin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG 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 UBS Group 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 UBS Group AG 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 UBS Group i.e., UBS Group and Martin Marietta go up and down completely randomly.
Pair Corralation between UBS Group and Martin Marietta
Assuming the 90 days trading horizon UBS Group AG is expected to generate 0.21 times more return on investment than Martin Marietta. However, UBS Group AG is 4.75 times less risky than Martin Marietta. It trades about 0.22 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.02 per unit of risk. If you would invest 64,400 in UBS Group AG on September 1, 2024 and sell it today you would earn a total of 849.00 from holding UBS Group AG or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS Group AG vs. Martin Marietta Materials
Performance |
| Timeline |
| UBS Group AG |
| Martin Marietta Materials |
UBS Group and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Group and Martin Marietta
The main advantage of trading using opposite UBS Group and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Group 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.| UBS Group vs. ING Groep NV | UBS Group vs. iShares Global Timber | UBS Group vs. Vanguard World | UBS Group vs. iShares Trust |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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