Correlation Between Martin Marietta and Banco Actinver

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

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

Diversification Opportunities for Martin Marietta and Banco Actinver

-0.09

Correlation Coefficient

Martin Marietta  Banco Actinver

Good diversification

The 3 months correlation between Martin and Banco is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Banco Actinver SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Actinver SA and Martin Marietta 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 Martin Marietta Materials are associated (or correlated) with Banco Actinver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Actinver SA has no effect on the direction of Martin Marietta i.e., Martin Marietta and Banco Actinver go up and down completely randomly.

Pair Corralation between Martin Marietta and Banco Actinver

Assuming the 90 days trading horizon Martin Marietta Materials is expected to generate 0.89 times more return on investment than Banco Actinver. However, Martin Marietta Materials is 1.13 times less risky than Banco Actinver. It trades about 0.14 of its potential returns per unit of risk. Banco Actinver SA is currently generating about -0.13 per unit of risk. If you would invest  1,017,723  in Martin Marietta Materials on September 13, 2024 and sell it today you would earn a total of  162,111  from holding Martin Marietta Materials or generate 15.93% return on investment over 90 days.

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

Martin Marietta Materials  vs.  Banco Actinver SA

Martin Marietta Materials

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Martin Marietta Materials are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating primary indicators, Martin Marietta showed solid returns over the last few months and may actually be approaching a breakup point.

Banco Actinver SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco Actinver SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Martin Marietta and Banco Actinver

The main advantage of trading using opposite Martin Marietta and Banco Actinver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Banco Actinver 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 Banco Actinver will offset losses from the drop in Banco Actinver's long position.

The idea behind Martin Marietta Materials and Banco Actinver SA 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.