Correlation Between Apollo Medical and Lockheed Martin
Can any of the company-specific risk be diversified away by investing in both Apollo Medical and Lockheed Martin 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 Apollo Medical and Lockheed Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Medical Holdings and Lockheed Martin, you can compare the effects of market volatilities on Apollo Medical and Lockheed Martin 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 Apollo Medical with a short position of Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and Lockheed Martin.
Diversification Opportunities for Apollo Medical and Lockheed Martin
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apollo and Lockheed is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and Apollo Medical 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 Apollo Medical Holdings are associated (or correlated) with Lockheed Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lockheed Martin has no effect on the direction of Apollo Medical i.e., Apollo Medical and Lockheed Martin go up and down completely randomly.
Pair Corralation between Apollo Medical and Lockheed Martin
Assuming the 90 days horizon Apollo Medical Holdings is expected to generate 0.82 times more return on investment than Lockheed Martin. However, Apollo Medical Holdings is 1.23 times less risky than Lockheed Martin. It trades about 0.15 of its potential returns per unit of risk. Lockheed Martin is currently generating about -0.03 per unit of risk. If you would invest 3,580 in Apollo Medical Holdings on September 4, 2024 and sell it today you would earn a total of 480.00 from holding Apollo Medical Holdings or generate 13.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Medical Holdings vs. Lockheed Martin
Performance |
| Timeline |
| Apollo Medical Holdings |
| Lockheed Martin |
Apollo Medical and Lockheed Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Medical and Lockheed Martin
The main advantage of trading using opposite Apollo Medical and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical position performs unexpectedly, Lockheed Martin 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 Lockheed Martin will offset losses from the drop in Lockheed Martin's long position.| Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc |
| Lockheed Martin vs. PTT Global Chemical | Lockheed Martin vs. Soken Chemical Engineering | Lockheed Martin vs. Apollo Medical Holdings | Lockheed Martin vs. Diamyd Medical AB |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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