Correlation Between MARTIN and Joint Corp

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

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

Diversification Opportunities for MARTIN and Joint Corp

0.31

Correlation Coefficient

MARTIN  Joint Corp

Weak diversification

The 3 months correlation between MARTIN and Joint is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding MARTIN MARIETTA MATLS and The Joint Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Corp and MARTIN 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 MATLS are associated (or correlated) with Joint Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Corp has no effect on the direction of MARTIN i.e., MARTIN and Joint Corp go up and down completely randomly.

Pair Corralation between MARTIN and Joint Corp

Assuming the 90 days trading horizon MARTIN MARIETTA MATLS is expected to generate 0.13 times more return on investment than Joint Corp. However, MARTIN MARIETTA MATLS is 7.68 times less risky than Joint Corp. It trades about 0.01 of its potential returns per unit of risk. The Joint Corp is currently generating about -0.01 per unit of risk. If you would invest  9,503  in MARTIN MARIETTA MATLS on October 24, 2024 and sell it today you would earn a total of  157.00  from holding MARTIN MARIETTA MATLS or generate 1.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	62.75%
Values	Daily Returns

MARTIN MARIETTA MATLS  vs.  The Joint Corp

MARTIN MARIETTA MATLS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARTIN MARIETTA MATLS 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.

Joint Corp

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Joint Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Joint Corp is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MARTIN and Joint Corp

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

The idea behind MARTIN MARIETTA MATLS and The Joint Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.