Correlation Between Q2M Managementberatu and Martin Marietta

Can any of the company-specific risk be diversified away by investing in both Q2M Managementberatu 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 Q2M Managementberatu and Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Q2M Managementberatung AG and Martin Marietta Materials, you can compare the effects of market volatilities on Q2M Managementberatu 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 Q2M Managementberatu with a short position of Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2M Managementberatu and Martin Marietta.

Diversification Opportunities for Q2M Managementberatu and Martin Marietta

0.4

Correlation Coefficient

Q2M Managementberatu  Martin Marietta

Very weak diversification

The 3 months correlation between Q2M and Martin is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Q2M Managementberatung AG 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 Q2M Managementberatu 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 Q2M Managementberatung AG 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 Q2M Managementberatu i.e., Q2M Managementberatu and Martin Marietta go up and down completely randomly.

Pair Corralation between Q2M Managementberatu and Martin Marietta

Assuming the 90 days trading horizon Q2M Managementberatung AG is expected to generate 0.44 times more return on investment than Martin Marietta. However, Q2M Managementberatung AG is 2.25 times less risky than Martin Marietta. It trades about -0.21 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about -0.16 per unit of risk. If you would invest  98.00  in Q2M Managementberatung AG on December 20, 2024 and sell it today you would lose (8.00) from holding Q2M Managementberatung AG or give up 8.16% of portfolio value over 90 days.

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

Q2M Managementberatung AG  vs.  Martin Marietta Materials

Q2M Managementberatung

Risk-Adjusted Performance

Very Weak

Over the last 90 days Q2M Managementberatung AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

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 unsteady 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 Q2M Managementberatu and Martin Marietta

The main advantage of trading using opposite Q2M Managementberatu and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2M Managementberatu 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 Q2M Managementberatung AG 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.