Correlation Between MESA Old and Martin Marietta

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

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

Diversification Opportunities for MESA Old and Martin Marietta

-0.1

Correlation Coefficient

MESA Old  Martin Marietta

Good diversification

The 3 months correlation between MESA and Martin is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding MESA Old 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 MESA Old 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 MESA Old 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 MESA Old i.e., MESA Old and Martin Marietta go up and down completely randomly.

Pair Corralation between MESA Old and Martin Marietta

Given the investment horizon of 90 days MESA Old is expected to generate 2.91 times more return on investment than Martin Marietta. However, MESA Old is 2.91 times more volatile than Martin Marietta Materials. It trades about 0.03 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.02 per unit of risk. If you would invest  2,055  in MESA Old on September 12, 2025 and sell it today you would earn a total of  45.00  from holding MESA Old or generate 2.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.13%
Values	Daily Returns

MESA Old  vs.  Martin Marietta Materials

MESA Old

Risk-Adjusted Performance

Weak

Over the last 90 days MESA Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MESA Old is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Martin Marietta Materials

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Martin Marietta Materials are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, Martin Marietta is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with MESA Old and Martin Marietta

The main advantage of trading using opposite MESA Old and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MESA Old 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 MESA Old 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.