Correlation Between Lockheed Martin and Carlsberg
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Carlsberg 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 Carlsberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Carlsberg AS B, you can compare the effects of market volatilities on Lockheed Martin and Carlsberg 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 Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Carlsberg.
Diversification Opportunities for Lockheed Martin and Carlsberg
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lockheed and Carlsberg is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Carlsberg AS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS B 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 Carlsberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg AS B has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Carlsberg go up and down completely randomly.
Pair Corralation between Lockheed Martin and Carlsberg
Considering the 90-day investment horizon Lockheed Martin is expected to generate 0.7 times more return on investment than Carlsberg. However, Lockheed Martin is 1.43 times less risky than Carlsberg. It trades about -0.19 of its potential returns per unit of risk. Carlsberg AS B is currently generating about -0.24 per unit of risk. If you would invest 57,110 in Lockheed Martin on August 24, 2024 and sell it today you would lose (2,909) from holding Lockheed Martin or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. Carlsberg AS B
Performance |
| Timeline |
| Lockheed Martin |
| Carlsberg AS B |
Lockheed Martin and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Carlsberg
The main advantage of trading using opposite Lockheed Martin and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Carlsberg 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 Carlsberg will offset losses from the drop in Carlsberg's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Carlsberg vs. Sabien Technology Group | Carlsberg vs. DXC Technology Co | Carlsberg vs. Livermore Investments Group | Carlsberg vs. New Residential Investment |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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