Correlation Between Lockheed Martin and DINE SAB
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and DINE SAB 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 Lockheed Martin and DINE SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and DINE SAB de, you can compare the effects of market volatilities on Lockheed Martin and DINE SAB 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 Lockheed Martin with a short position of DINE SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and DINE SAB.
Diversification Opportunities for Lockheed Martin and DINE SAB
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lockheed and DINE is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and DINE SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DINE SAB de and Lockheed Martin 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 Lockheed Martin are associated (or correlated) with DINE SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DINE SAB de has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and DINE SAB go up and down completely randomly.
Pair Corralation between Lockheed Martin and DINE SAB
Assuming the 90 days trading horizon Lockheed Martin is expected to under-perform the DINE SAB. In addition to that, Lockheed Martin is 1.39 times more volatile than DINE SAB de. It trades about -0.25 of its total potential returns per unit of risk. DINE SAB de is currently generating about 0.13 per unit of volatility. If you would invest 2,100 in DINE SAB de on November 28, 2024 and sell it today you would earn a total of 100.00 from holding DINE SAB de or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lockheed Martin vs. DINE SAB de
Performance |
| Timeline |
| Lockheed Martin |
| DINE SAB de |
Lockheed Martin and DINE SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and DINE SAB
The main advantage of trading using opposite Lockheed Martin and DINE SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, DINE SAB 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 DINE SAB will offset losses from the drop in DINE SAB's long position.| Lockheed Martin vs. Air Transport Services | Lockheed Martin vs. FIBRA Storage | Lockheed Martin vs. Salesforce, | Lockheed Martin vs. First Republic Bank |
| DINE SAB vs. Ameriprise Financial | DINE SAB vs. United Airlines Holdings | DINE SAB vs. Samsung Electronics Co | DINE SAB vs. Salesforce, |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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