Correlation Between Martin Marietta and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on Martin Marietta and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and Ross Stores.
Diversification Opportunities for Martin Marietta and Ross Stores
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Martin and Ross is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Martin Marietta i.e., Martin Marietta and Ross Stores go up and down completely randomly.
Pair Corralation between Martin Marietta and Ross Stores
Assuming the 90 days horizon Martin Marietta Materials is expected to generate 0.59 times more return on investment than Ross Stores. However, Martin Marietta Materials is 1.71 times less risky than Ross Stores. It trades about 0.12 of its potential returns per unit of risk. Ross Stores is currently generating about -0.02 per unit of risk. If you would invest 43,777 in Martin Marietta Materials on April 23, 2025 and sell it today you would earn a total of 4,723 from holding Martin Marietta Materials or generate 10.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Martin Marietta Materials vs. Ross Stores
Performance |
Timeline |
Martin Marietta Materials |
Ross Stores |
Martin Marietta and Ross Stores Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Martin Marietta and Ross Stores
The main advantage of trading using opposite Martin Marietta and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.Martin Marietta vs. Ross Stores | Martin Marietta vs. Parkson Retail Group | Martin Marietta vs. National Retail Properties | Martin Marietta vs. Sun Art Retail |
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Check out your portfolio center.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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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