Correlation Between Liaoning Port and Martin Marietta

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

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

Diversification Opportunities for Liaoning Port and Martin Marietta

0.83

Correlation Coefficient

Liaoning Port  Martin Marietta

Very poor diversification

The 3 months correlation between Liaoning and Martin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Port CoLtd 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 Liaoning Port 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 Liaoning Port CoLtd 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 Liaoning Port i.e., Liaoning Port and Martin Marietta go up and down completely randomly.

Pair Corralation between Liaoning Port and Martin Marietta

Assuming the 90 days horizon Liaoning Port CoLtd is expected to generate 0.96 times more return on investment than Martin Marietta. However, Liaoning Port CoLtd is 1.04 times less risky than Martin Marietta. It trades about -0.06 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  7.90  in Liaoning Port CoLtd on December 23, 2024 and sell it today you would lose (0.45) from holding Liaoning Port CoLtd or give up 5.7% of portfolio value over 90 days.

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

Liaoning Port CoLtd  vs.  Martin Marietta Materials

Liaoning Port CoLtd

Risk-Adjusted Performance

Very Weak

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

Martin Marietta Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Martin Marietta Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Liaoning Port and Martin Marietta

The main advantage of trading using opposite Liaoning Port and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Port 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 Liaoning Port CoLtd 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 CEOs Directory module to screen CEOs from public companies around the world.