Correlation Between Hisense Home and Martin Marietta

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

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

Diversification Opportunities for Hisense Home and Martin Marietta

0.33

Correlation Coefficient

Hisense Home  Martin Marietta

Weak diversification

The 3 months correlation between Hisense and Martin is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances 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 Hisense Home 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 Hisense Home Appliances 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 Hisense Home i.e., Hisense Home and Martin Marietta go up and down completely randomly.

Pair Corralation between Hisense Home and Martin Marietta

Assuming the 90 days horizon Hisense Home Appliances is expected to generate 2.85 times more return on investment than Martin Marietta. However, Hisense Home is 2.85 times more volatile than Martin Marietta Materials. It trades about 0.09 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.05 per unit of risk. If you would invest  78.00  in Hisense Home Appliances on December 22, 2024 and sell it today you would earn a total of  246.00  from holding Hisense Home Appliances or generate 315.38% return on investment over 90 days.

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

Hisense Home Appliances  vs.  Martin Marietta Materials

Hisense Home Appliances

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hisense Home Appliances are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Hisense Home may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 Hisense Home and Martin Marietta

The main advantage of trading using opposite Hisense Home and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home 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 Hisense Home Appliances 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..