Correlation Between Superior Plus and Lockheed Martin
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Lockheed Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Lockheed Martin, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Lockheed Martin.
Diversification Opportunities for Superior Plus and Lockheed Martin
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Superior and Lockheed is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Lockheed Martin go up and down completely randomly.
Pair Corralation between Superior Plus and Lockheed Martin
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Lockheed Martin. In addition to that, Superior Plus is 1.85 times more volatile than Lockheed Martin. It trades about -0.03 of its total potential returns per unit of risk. Lockheed Martin is currently generating about 0.06 per unit of volatility. If you would invest 39,127 in Lockheed Martin on September 14, 2024 and sell it today you would earn a total of 8,233 from holding Lockheed Martin or generate 21.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Lockheed Martin
Performance |
| Timeline |
| Superior Plus Corp |
| Lockheed Martin |
Superior Plus and Lockheed Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Lockheed Martin
The main advantage of trading using opposite Superior Plus and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. Boiron SA | Superior Plus vs. COSMOSTEEL HLDGS | Superior Plus vs. Vastned Retail NV | Superior Plus vs. BURLINGTON STORES |
| Lockheed Martin vs. Airbus SE | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. Superior Plus Corp | Lockheed Martin vs. Origin Agritech |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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