Correlation Between Direct Line and MARTIN
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By analyzing existing cross correlation between Direct Line Insurance and MARTIN MARIETTA MATERIALS, you can compare the effects of market volatilities on Direct Line and MARTIN 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 Direct Line with a short position of MARTIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direct Line and MARTIN.
Diversification Opportunities for Direct Line and MARTIN
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Direct and MARTIN is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Direct Line Insurance 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 Direct Line 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 Direct Line Insurance are associated (or correlated) with MARTIN. 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 Direct Line i.e., Direct Line and MARTIN go up and down completely randomly.
Pair Corralation between Direct Line and MARTIN
Assuming the 90 days horizon Direct Line Insurance is expected to generate 6.05 times more return on investment than MARTIN. However, Direct Line is 6.05 times more volatile than MARTIN MARIETTA MATERIALS. It trades about 0.36 of its potential returns per unit of risk. MARTIN MARIETTA MATERIALS is currently generating about -0.25 per unit of risk. If you would invest 794.00 in Direct Line Insurance on September 25, 2024 and sell it today you would earn a total of 459.00 from holding Direct Line Insurance or generate 57.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Direct Line Insurance vs. MARTIN MARIETTA MATERIALS
Performance |
Timeline |
Direct Line Insurance |
MARTIN MARIETTA MATERIALS |
Direct Line and MARTIN Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Direct Line and MARTIN
The main advantage of trading using opposite Direct Line and MARTIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direct Line position performs unexpectedly, MARTIN 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 will offset losses from the drop in MARTIN's long position.Direct Line vs. Oasis Hotel Resort | Direct Line vs. Boston Beer | Direct Line vs. Keurig Dr Pepper | Direct Line vs. The Wendys Co |
MARTIN vs. United Fire Group | MARTIN vs. Direct Line Insurance | MARTIN vs. RadNet Inc | MARTIN vs. Siriuspoint |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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