Correlation Between Airbus Group and Lockheed Martin
Can any of the company-specific risk be diversified away by investing in both Airbus Group 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 Airbus Group and Lockheed Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airbus Group NV and Lockheed Martin, you can compare the effects of market volatilities on Airbus Group 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 Airbus Group with a short position of Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus Group and Lockheed Martin.
Diversification Opportunities for Airbus Group and Lockheed Martin
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Airbus and Lockheed is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Airbus Group NV and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and Airbus Group 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 Airbus Group NV 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 Airbus Group i.e., Airbus Group and Lockheed Martin go up and down completely randomly.
Pair Corralation between Airbus Group and Lockheed Martin
Assuming the 90 days horizon Airbus Group NV is expected to generate 1.29 times more return on investment than Lockheed Martin. However, Airbus Group is 1.29 times more volatile than Lockheed Martin. It trades about 0.12 of its potential returns per unit of risk. Lockheed Martin is currently generating about -0.12 per unit of risk. If you would invest 3,607 in Airbus Group NV on September 12, 2024 and sell it today you would earn a total of 489.00 from holding Airbus Group NV or generate 13.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Airbus Group NV vs. Lockheed Martin
Performance |
| Timeline |
| Airbus Group NV |
| Lockheed Martin |
Airbus Group and Lockheed Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbus Group and Lockheed Martin
The main advantage of trading using opposite Airbus Group and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus Group 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.| Airbus Group vs. Safran SA | Airbus Group vs. Moog Inc | Airbus Group vs. BAE Systems PLC | Airbus Group vs. Airbus Group SE |
| Lockheed Martin vs. Novocure | Lockheed Martin vs. HubSpot | Lockheed Martin vs. DigitalOcean Holdings | Lockheed Martin vs. Appian Corp |
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.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Global Correlations Find global opportunities by holding instruments from different markets |