Correlation Between ConocoPhillips and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both ConocoPhillips 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 ConocoPhillips and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConocoPhillips and Martin Marietta Materials, you can compare the effects of market volatilities on ConocoPhillips 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 ConocoPhillips with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConocoPhillips and Martin Marietta.
Diversification Opportunities for ConocoPhillips and Martin Marietta
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ConocoPhillips and Martin is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ConocoPhillips 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 ConocoPhillips 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 ConocoPhillips 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 ConocoPhillips i.e., ConocoPhillips and Martin Marietta go up and down completely randomly.
Pair Corralation between ConocoPhillips and Martin Marietta
Assuming the 90 days horizon ConocoPhillips is expected to generate 0.97 times more return on investment than Martin Marietta. However, ConocoPhillips is 1.03 times less risky than Martin Marietta. It trades about 0.52 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 9,178 in ConocoPhillips on October 24, 2024 and sell it today you would earn a total of 1,100 from holding ConocoPhillips or generate 11.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ConocoPhillips vs. Martin Marietta Materials
Performance |
| Timeline |
| ConocoPhillips |
| Martin Marietta Materials |
ConocoPhillips and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConocoPhillips and Martin Marietta
The main advantage of trading using opposite ConocoPhillips and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConocoPhillips 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.| ConocoPhillips vs. Martin Marietta Materials | ConocoPhillips vs. The Yokohama Rubber | ConocoPhillips vs. Chunghwa Telecom Co | ConocoPhillips vs. Telecom Argentina SA |
| Martin Marietta vs. Tower One Wireless | Martin Marietta vs. Infrastrutture Wireless Italiane | Martin Marietta vs. Entravision Communications | Martin Marietta vs. MOBILE FACTORY INC |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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