Correlation Between Grupo Carso and Martin Marietta

Can any of the company-specific risk be diversified away by investing in both Grupo Carso 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 Grupo Carso and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grupo Carso SAB and Martin Marietta Materials, you can compare the effects of market volatilities on Grupo Carso 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 Grupo Carso with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and Martin Marietta.

Diversification Opportunities for Grupo Carso and Martin Marietta

0.23

Correlation Coefficient

Grupo Carso  Martin Marietta

Modest diversification

The 3 months correlation between Grupo and Martin is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB 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 Grupo Carso 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 Grupo Carso SAB 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 Grupo Carso i.e., Grupo Carso and Martin Marietta go up and down completely randomly.

Pair Corralation between Grupo Carso and Martin Marietta

Assuming the 90 days horizon Grupo Carso SAB is expected to under-perform the Martin Marietta. In addition to that, Grupo Carso is 1.73 times more volatile than Martin Marietta Materials. It trades about -0.01 of its total potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.03 per unit of volatility. If you would invest  51,847  in Martin Marietta Materials on October 22, 2024 and sell it today you would earn a total of  953.00  from holding Martin Marietta Materials or generate 1.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Grupo Carso SAB  vs.  Martin Marietta Materials

Grupo Carso SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Carso SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Grupo Carso is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Martin Marietta Materials

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Martin Marietta Materials are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Martin Marietta is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Grupo Carso and Martin Marietta

The main advantage of trading using opposite Grupo Carso and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso 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.

The idea behind Grupo Carso SAB and Martin Marietta Materials pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.