Correlation Between Lockheed Martin and Radiant Globaltech
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Radiant Globaltech 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 Radiant Globaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Radiant Globaltech Bhd, you can compare the effects of market volatilities on Lockheed Martin and Radiant Globaltech 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 Radiant Globaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Radiant Globaltech.
Diversification Opportunities for Lockheed Martin and Radiant Globaltech
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lockheed and Radiant is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Radiant Globaltech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radiant Globaltech Bhd 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 Radiant Globaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radiant Globaltech Bhd has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Radiant Globaltech go up and down completely randomly.
Pair Corralation between Lockheed Martin and Radiant Globaltech
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Radiant Globaltech. But the stock apears to be less risky and, when comparing its historical volatility, Lockheed Martin is 1.77 times less risky than Radiant Globaltech. The stock trades about -0.19 of its potential returns per unit of risk. The Radiant Globaltech Bhd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Radiant Globaltech Bhd on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Radiant Globaltech Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lockheed Martin vs. Radiant Globaltech Bhd
Performance |
| Timeline |
| Lockheed Martin |
| Radiant Globaltech Bhd |
Lockheed Martin and Radiant Globaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Radiant Globaltech
The main advantage of trading using opposite Lockheed Martin and Radiant Globaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Radiant Globaltech 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 Radiant Globaltech will offset losses from the drop in Radiant Globaltech's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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