Correlation Between Ford and MARTIN
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By analyzing existing cross correlation between Ford Motor and MARTIN MARIETTA MATLS, you can compare the effects of market volatilities on Ford 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 Ford with a short position of MARTIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and MARTIN.
Diversification Opportunities for Ford and MARTIN
Weak diversification
The 3 months correlation between Ford and MARTIN is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor 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 Ford 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 Ford Motor 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 Ford i.e., Ford and MARTIN go up and down completely randomly.
Pair Corralation between Ford and MARTIN
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the MARTIN. In addition to that, Ford is 6.65 times more volatile than MARTIN MARIETTA MATLS. It trades about -0.01 of its total potential returns per unit of risk. MARTIN MARIETTA MATLS is currently generating about -0.01 per unit of volatility. If you would invest 9,602 in MARTIN MARIETTA MATLS on September 24, 2024 and sell it today you would lose (55.00) from holding MARTIN MARIETTA MATLS or give up 0.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 62.65% |
Values | Daily Returns |
Ford Motor vs. MARTIN MARIETTA MATLS
Performance |
Timeline |
Ford Motor |
MARTIN MARIETTA MATLS |
Ford and MARTIN Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and MARTIN
The main advantage of trading using opposite Ford and MARTIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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 Ford Motor 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.MARTIN vs. AEP TEX INC | MARTIN vs. US BANK NATIONAL | MARTIN vs. Brightsphere Investment Group | MARTIN vs. Neurocrine Biosciences |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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