Correlation Between ASPEN TECHINC and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both ASPEN TECHINC 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 ASPEN TECHINC and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASPEN TECHINC DL and Martin Marietta Materials, you can compare the effects of market volatilities on ASPEN TECHINC 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 ASPEN TECHINC with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASPEN TECHINC and Martin Marietta.
Diversification Opportunities for ASPEN TECHINC and Martin Marietta
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASPEN and Martin is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding ASPEN TECHINC DL 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 ASPEN TECHINC 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 ASPEN TECHINC DL 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 ASPEN TECHINC i.e., ASPEN TECHINC and Martin Marietta go up and down completely randomly.
Pair Corralation between ASPEN TECHINC and Martin Marietta
Assuming the 90 days horizon ASPEN TECHINC DL is expected to generate 1.01 times more return on investment than Martin Marietta. However, ASPEN TECHINC is 1.01 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 -0.4 per unit of risk. If you would invest 22,400 in ASPEN TECHINC DL on October 11, 2024 and sell it today you would earn a total of 1,600 from holding ASPEN TECHINC DL or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
ASPEN TECHINC DL vs. Martin Marietta Materials
Performance |
| Timeline |
| ASPEN TECHINC DL |
| Martin Marietta Materials |
ASPEN TECHINC and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASPEN TECHINC and Martin Marietta
The main advantage of trading using opposite ASPEN TECHINC and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASPEN TECHINC 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.| ASPEN TECHINC vs. Automatic Data Processing | ASPEN TECHINC vs. CODERE ONLINE LUX | ASPEN TECHINC vs. ZhongAn Online P | ASPEN TECHINC vs. SILVER BULLET DATA |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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