Correlation Between GP Investments and Martin Marietta

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

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

Diversification Opportunities for GP Investments and Martin Marietta

-0.18

Correlation Coefficient

GP Investments  Martin Marietta

Good diversification

The 3 months correlation between GPIV33 and Martin is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding GP Investments and Martin Marietta Materials, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Marietta Mate and GP Investments 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 GP Investments 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 Mate has no effect on the direction of GP Investments i.e., GP Investments and Martin Marietta go up and down completely randomly.

Pair Corralation between GP Investments and Martin Marietta

Assuming the 90 days trading horizon GP Investments is expected to generate 25.01 times more return on investment than Martin Marietta. However, GP Investments is 25.01 times more volatile than Martin Marietta Materials,. It trades about 0.0 of its potential returns per unit of risk. Martin Marietta Materials, is currently generating about -0.11 per unit of risk. If you would invest  375.00  in GP Investments on December 26, 2024 and sell it today you would lose (10.00) from holding GP Investments or give up 2.67% of portfolio value over 90 days.

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

GP Investments  vs.  Martin Marietta Materials,

GP Investments

Risk-Adjusted Performance

Very Weak

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

Martin Marietta Mate

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. Despite somewhat strong essential indicators, Martin Marietta is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GP Investments and Martin Marietta

The main advantage of trading using opposite GP Investments and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Investments 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 GP Investments 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.