Correlation Between ZJK Industrial and Martin Marietta

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

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

Diversification Opportunities for ZJK Industrial and Martin Marietta

-0.11

Correlation Coefficient

ZJK Industrial  Martin Marietta

Good diversification

The 3 months correlation between ZJK and Martin is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding ZJK Industrial Co, 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 ZJK Industrial 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 ZJK Industrial Co, 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 ZJK Industrial i.e., ZJK Industrial and Martin Marietta go up and down completely randomly.

Pair Corralation between ZJK Industrial and Martin Marietta

Considering the 90-day investment horizon ZJK Industrial Co, is expected to generate 38.75 times more return on investment than Martin Marietta. However, ZJK Industrial is 38.75 times more volatile than Martin Marietta Materials. It trades about 0.15 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about -0.59 per unit of risk. If you would invest  505.00  in ZJK Industrial Co, on September 23, 2024 and sell it today you would earn a total of  227.00  from holding ZJK Industrial Co, or generate 44.95% return on investment over 90 days.

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

ZJK Industrial Co,  vs.  Martin Marietta Materials

ZJK Industrial Co,

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZJK Industrial Co, are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking indicators, ZJK Industrial disclosed solid returns over the last few months and may actually be approaching a breakup point.

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. In spite of very healthy essential indicators, Martin Marietta is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ZJK Industrial and Martin Marietta

The main advantage of trading using opposite ZJK Industrial and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZJK Industrial 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 ZJK Industrial Co, 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.