Correlation Between MAANSHAN IRON and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both MAANSHAN IRON 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 MAANSHAN IRON and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAANSHAN IRON H and Martin Marietta Materials, you can compare the effects of market volatilities on MAANSHAN IRON 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 MAANSHAN IRON with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAANSHAN IRON and Martin Marietta.
Diversification Opportunities for MAANSHAN IRON and Martin Marietta
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MAANSHAN and Martin is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding MAANSHAN IRON H 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 MAANSHAN IRON 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 MAANSHAN IRON H 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 MAANSHAN IRON i.e., MAANSHAN IRON and Martin Marietta go up and down completely randomly.
Pair Corralation between MAANSHAN IRON and Martin Marietta
Assuming the 90 days trading horizon MAANSHAN IRON H is expected to generate 4.97 times more return on investment than Martin Marietta. However, MAANSHAN IRON is 4.97 times more volatile than Martin Marietta Materials. It trades about 0.18 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.15 per unit of risk. If you would invest 17.00 in MAANSHAN IRON H on October 31, 2024 and sell it today you would earn a total of 3.00 from holding MAANSHAN IRON H or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
MAANSHAN IRON H vs. Martin Marietta Materials
Performance |
| Timeline |
| MAANSHAN IRON H |
| Martin Marietta Materials |
MAANSHAN IRON and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAANSHAN IRON and Martin Marietta
The main advantage of trading using opposite MAANSHAN IRON and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAANSHAN IRON 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.| MAANSHAN IRON vs. Apple Inc | MAANSHAN IRON vs. Apple Inc | MAANSHAN IRON vs. Apple Inc | MAANSHAN IRON vs. Apple Inc |
| Martin Marietta vs. GigaMedia | Martin Marietta vs. SILICON LABORATOR | Martin Marietta vs. GameStop Corp | Martin Marietta vs. PLAYMATES TOYS |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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