Correlation Between Integral and MARTIN

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

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

Diversification Opportunities for Integral and MARTIN

0.09

Correlation Coefficient

Integral  MARTIN

Significant diversification

The 3 months correlation between Integral and MARTIN is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science 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 Integral 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 Integral Ad Science 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 Integral i.e., Integral and MARTIN go up and down completely randomly.

Pair Corralation between Integral and MARTIN

Considering the 90-day investment horizon Integral Ad Science is expected to under-perform the MARTIN. In addition to that, Integral is 1.99 times more volatile than MARTIN MARIETTA MATERIALS. It trades about -0.14 of its total potential returns per unit of risk. MARTIN MARIETTA MATERIALS is currently generating about -0.11 per unit of volatility. If you would invest  8,584  in MARTIN MARIETTA MATERIALS on October 15, 2024 and sell it today you would lose (247.00) from holding MARTIN MARIETTA MATERIALS or give up 2.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

Integral Ad Science  vs.  MARTIN MARIETTA MATERIALS

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

MARTIN MARIETTA MATERIALS

Risk-Adjusted Performance

0 of 100

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 basic indicators, MARTIN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Integral and MARTIN

The main advantage of trading using opposite Integral and MARTIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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 Integral Ad Science 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.