Correlation Between Lockheed Martin and DXC Technology
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and DXC Technology 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 DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and DXC Technology, you can compare the effects of market volatilities on Lockheed Martin and DXC Technology 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 DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and DXC Technology.
Diversification Opportunities for Lockheed Martin and DXC Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lockheed and DXC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and DXC Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology 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 DXC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DXC Technology has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and DXC Technology go up and down completely randomly.
Pair Corralation between Lockheed Martin and DXC Technology
If you would invest 767,684 in Lockheed Martin on September 3, 2024 and sell it today you would earn a total of 327,965 from holding Lockheed Martin or generate 42.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.32% |
| Values | Daily Returns |
Lockheed Martin vs. DXC Technology
Performance |
| Timeline |
| Lockheed Martin |
| DXC Technology |
Lockheed Martin and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and DXC Technology
The main advantage of trading using opposite Lockheed Martin and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, DXC Technology 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 DXC Technology will offset losses from the drop in DXC Technology's long position.| Lockheed Martin vs. DXC Technology | Lockheed Martin vs. FIBRA Storage | Lockheed Martin vs. Cognizant Technology Solutions | Lockheed Martin vs. Monster Beverage Corp |
| DXC Technology vs. Cognizant Technology Solutions | DXC Technology vs. The Select Sector | DXC Technology vs. Promotora y Operadora | DXC Technology vs. SPDR Series Trust |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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