Correlation Between PTT Global and Lockheed Martin
Can any of the company-specific risk be diversified away by investing in both PTT Global 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 PTT Global and Lockheed Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Global Chemical and Lockheed Martin, you can compare the effects of market volatilities on PTT Global 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 PTT Global with a short position of Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and Lockheed Martin.
Diversification Opportunities for PTT Global and Lockheed Martin
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PTT and Lockheed is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and PTT Global 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 PTT Global Chemical 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 PTT Global i.e., PTT Global and Lockheed Martin go up and down completely randomly.
Pair Corralation between PTT Global and Lockheed Martin
Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 1.44 times more return on investment than Lockheed Martin. However, PTT Global is 1.44 times more volatile than Lockheed Martin. It trades about 0.01 of its potential returns per unit of risk. Lockheed Martin is currently generating about -0.27 per unit of risk. If you would invest 65.00 in PTT Global Chemical on September 12, 2024 and sell it today you would earn a total of 0.00 from holding PTT Global Chemical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. Lockheed Martin
Performance |
| Timeline |
| PTT Global Chemical |
| Lockheed Martin |
PTT Global and Lockheed Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and Lockheed Martin
The main advantage of trading using opposite PTT Global and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global 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.The idea behind PTT Global Chemical and Lockheed Martin 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.| Lockheed Martin vs. Haier Smart Home | Lockheed Martin vs. Taylor Morrison Home | Lockheed Martin vs. UNITED RENTALS | Lockheed Martin vs. Alfa Financial Software |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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