Correlation Between Martin Marietta and CRH PLC
Can any of the company-specific risk be diversified away by investing in both Martin Marietta and CRH PLC 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 CRH PLC 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 CRH PLC ADR, you can compare the effects of market volatilities on Martin Marietta and CRH PLC 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 CRH PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Marietta and CRH PLC.
Diversification Opportunities for Martin Marietta and CRH PLC
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Martin and CRH is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Martin Marietta Materials and CRH PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRH PLC ADR 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 CRH PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRH PLC ADR has no effect on the direction of Martin Marietta i.e., Martin Marietta and CRH PLC go up and down completely randomly.
Pair Corralation between Martin Marietta and CRH PLC
Considering the 90-day investment horizon Martin Marietta Materials is expected to generate 0.82 times more return on investment than CRH PLC. However, Martin Marietta Materials is 1.21 times less risky than CRH PLC. It trades about 0.16 of its potential returns per unit of risk. CRH PLC ADR is currently generating about 0.08 per unit of risk. If you would invest 49,762 in Martin Marietta Materials on April 23, 2025 and sell it today you would earn a total of 6,564 from holding Martin Marietta Materials or generate 13.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Marietta Materials vs. CRH PLC ADR
Performance |
| Timeline |
| Martin Marietta Materials |
| CRH PLC ADR |
Martin Marietta and CRH PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Marietta and CRH PLC
The main advantage of trading using opposite Martin Marietta and CRH PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Marietta position performs unexpectedly, CRH PLC 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 CRH PLC will offset losses from the drop in CRH PLC's long position.| Martin Marietta vs. Vulcan Materials | Martin Marietta vs. Eagle Materials | Martin Marietta vs. CRH PLC ADR | Martin Marietta vs. Cemex SAB de |
| CRH PLC vs. Vulcan Materials | CRH PLC vs. Martin Marietta Materials | CRH PLC vs. James Hardie Industries | CRH PLC vs. Eagle Materials |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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