Correlation Between CRISPR Therapeutics and Martin Marietta

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

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

Diversification Opportunities for CRISPR Therapeutics and Martin Marietta

-0.34

Correlation Coefficient

CRISPR Therapeutics  Martin Marietta

Very good diversification

The 3 months correlation between CRISPR and Martin is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CRISPR Therapeutics AG and Martin Marietta Materials, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Marietta Mate and CRISPR Therapeutics 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 CRISPR Therapeutics AG 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 Mate has no effect on the direction of CRISPR Therapeutics i.e., CRISPR Therapeutics and Martin Marietta go up and down completely randomly.

Pair Corralation between CRISPR Therapeutics and Martin Marietta

Assuming the 90 days trading horizon CRISPR Therapeutics AG is expected to under-perform the Martin Marietta. In addition to that, CRISPR Therapeutics is 229.18 times more volatile than Martin Marietta Materials,. It trades about -0.04 of its total potential returns per unit of risk. Martin Marietta Materials, is currently generating about 0.13 per unit of volatility. If you would invest  56,187  in Martin Marietta Materials, on October 23, 2024 and sell it today you would earn a total of  63.00  from holding Martin Marietta Materials, or generate 0.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CRISPR Therapeutics AG  vs.  Martin Marietta Materials,

CRISPR Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CRISPR Therapeutics AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Martin Marietta Mate

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Martin Marietta Materials, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Martin Marietta is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CRISPR Therapeutics and Martin Marietta

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

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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.