Correlation Between VARIOUS EATERIES and Martin Marietta

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

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

Diversification Opportunities for VARIOUS EATERIES and Martin Marietta

0.33

Correlation Coefficient

VARIOUS EATERIES  Martin Marietta

Weak diversification

The 3 months correlation between VARIOUS and Martin is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS 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 VARIOUS EATERIES 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 VARIOUS EATERIES LS 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 VARIOUS EATERIES i.e., VARIOUS EATERIES and Martin Marietta go up and down completely randomly.

Pair Corralation between VARIOUS EATERIES and Martin Marietta

Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the Martin Marietta. In addition to that, VARIOUS EATERIES is 1.05 times more volatile than Martin Marietta Materials. It trades about -0.1 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  44,924  in Martin Marietta Materials on October 9, 2024 and sell it today you would earn a total of  4,076  from holding Martin Marietta Materials or generate 9.07% return on investment over 90 days.

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

VARIOUS EATERIES LS  vs.  Martin Marietta Materials

VARIOUS EATERIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VARIOUS EATERIES LS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Martin Marietta Materials

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Martin Marietta Materials are ranked lower than 4 (%) 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 VARIOUS EATERIES and Martin Marietta

The main advantage of trading using opposite VARIOUS EATERIES and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES 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 VARIOUS EATERIES LS 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.