Correlation Between Martin Marietta and ONWARD MEDICAL

Can any of the company-specific risk be diversified away by investing in both Martin Marietta and ONWARD MEDICAL 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 ONWARD MEDICAL 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 ONWARD MEDICAL BV, you can compare the effects of market volatilities on Martin Marietta and ONWARD MEDICAL 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 ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and ONWARD MEDICAL.

Diversification Opportunities for Martin Marietta and ONWARD MEDICAL

0.2

Correlation Coefficient

Martin Marietta  ONWARD MEDICAL

Modest diversification

The 3 months correlation between Martin and ONWARD is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV 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 ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of Martin Marietta i.e., Martin Marietta and ONWARD MEDICAL go up and down completely randomly.

Pair Corralation between Martin Marietta and ONWARD MEDICAL

Assuming the 90 days trading horizon Martin Marietta Materials is expected to under-perform the ONWARD MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, Martin Marietta Materials is 2.09 times less risky than ONWARD MEDICAL. The stock trades about -0.01 of its potential returns per unit of risk. The ONWARD MEDICAL BV is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  459.00  in ONWARD MEDICAL BV on March 23, 2025 and sell it today you would lose (37.00) from holding ONWARD MEDICAL BV or give up 8.06% of portfolio value over 90 days.

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

Martin Marietta Materials  vs.  ONWARD MEDICAL BV

Martin Marietta Materials

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Martin Marietta Materials are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Martin Marietta may actually be approaching a critical reversion point that can send shares even higher in July 2025.

ONWARD MEDICAL BV

Risk-Adjusted Performance

Very Weak

Over the last 90 days ONWARD MEDICAL BV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ONWARD MEDICAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Martin Marietta and ONWARD MEDICAL

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

The idea behind Martin Marietta Materials and ONWARD MEDICAL BV 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 Stocks Directory module to find actively traded stocks across global markets.