Correlation Between KRISPY KREME and Lockheed Martin
Can any of the company-specific risk be diversified away by investing in both KRISPY KREME 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 KRISPY KREME and Lockheed Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KRISPY KREME DL 01 and Lockheed Martin, you can compare the effects of market volatilities on KRISPY KREME 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 KRISPY KREME with a short position of Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of KRISPY KREME and Lockheed Martin.
Diversification Opportunities for KRISPY KREME and Lockheed Martin
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KRISPY and Lockheed is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding KRISPY KREME DL 01 and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and KRISPY KREME 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 KRISPY KREME DL 01 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 KRISPY KREME i.e., KRISPY KREME and Lockheed Martin go up and down completely randomly.
Pair Corralation between KRISPY KREME and Lockheed Martin
Assuming the 90 days horizon KRISPY KREME DL 01 is expected to under-perform the Lockheed Martin. In addition to that, KRISPY KREME is 2.69 times more volatile than Lockheed Martin. It trades about 0.0 of its total potential returns per unit of risk. Lockheed Martin is currently generating about 0.07 per unit of volatility. If you would invest 40,687 in Lockheed Martin on September 4, 2024 and sell it today you would earn a total of 8,873 from holding Lockheed Martin or generate 21.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KRISPY KREME DL 01 vs. Lockheed Martin
Performance |
| Timeline |
| KRISPY KREME DL |
| Lockheed Martin |
KRISPY KREME and Lockheed Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KRISPY KREME and Lockheed Martin
The main advantage of trading using opposite KRISPY KREME and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KRISPY KREME 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.| KRISPY KREME vs. LIFENET INSURANCE CO | KRISPY KREME vs. CPU SOFTWAREHOUSE | KRISPY KREME vs. UNIVMUSIC GRPADR050 | KRISPY KREME vs. UPDATE SOFTWARE |
| Lockheed Martin vs. Evolution Mining Limited | Lockheed Martin vs. Perseus Mining Limited | Lockheed Martin vs. Insteel Industries | Lockheed Martin vs. MCEWEN MINING INC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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