Correlation Between ESGL Holdings and MARTIN

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

By analyzing existing cross correlation between ESGL Holdings Limited and MARTIN MARIETTA MATLS, you can compare the effects of market volatilities on ESGL Holdings 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 ESGL Holdings with a short position of MARTIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESGL Holdings and MARTIN.

Diversification Opportunities for ESGL Holdings and MARTIN

-0.34

Correlation Coefficient

ESGL Holdings  MARTIN

Very good diversification

The 3 months correlation between ESGL and MARTIN is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ESGL Holdings Limited and MARTIN MARIETTA MATLS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARTIN MARIETTA MATLS and ESGL Holdings 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 ESGL Holdings Limited 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 MATLS has no effect on the direction of ESGL Holdings i.e., ESGL Holdings and MARTIN go up and down completely randomly.

Pair Corralation between ESGL Holdings and MARTIN

Assuming the 90 days horizon ESGL Holdings Limited is expected to under-perform the MARTIN. In addition to that, ESGL Holdings is 17.02 times more volatile than MARTIN MARIETTA MATLS. It trades about -0.18 of its total potential returns per unit of risk. MARTIN MARIETTA MATLS is currently generating about -0.31 per unit of volatility. If you would invest  9,744  in MARTIN MARIETTA MATLS on October 12, 2024 and sell it today you would lose (197.00) from holding MARTIN MARIETTA MATLS or give up 2.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.33%
Values	Daily Returns

ESGL Holdings Limited  vs.  MARTIN MARIETTA MATLS

ESGL Holdings Limited

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ESGL Holdings Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent essential indicators, ESGL Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

MARTIN MARIETTA MATLS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARTIN MARIETTA MATLS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MARTIN is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ESGL Holdings and MARTIN

The main advantage of trading using opposite ESGL Holdings and MARTIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESGL Holdings 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.

The idea behind ESGL Holdings Limited and MARTIN MARIETTA MATLS 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.