Correlation Between Lockheed Martin and American Aires
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and American Aires 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 American Aires into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and American Aires, you can compare the effects of market volatilities on Lockheed Martin and American Aires 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 American Aires. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and American Aires.
Diversification Opportunities for Lockheed Martin and American Aires
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lockheed and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and American Aires in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Aires 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 American Aires. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Aires has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and American Aires go up and down completely randomly.
Pair Corralation between Lockheed Martin and American Aires
If you would invest 0.00 in American Aires on August 24, 2024 and sell it today you would earn a total of 0.00 from holding American Aires or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Lockheed Martin vs. American Aires
Performance |
| Timeline |
| Lockheed Martin |
| American Aires |
Lockheed Martin and American Aires Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and American Aires
The main advantage of trading using opposite Lockheed Martin and American Aires positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, American Aires 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 American Aires will offset losses from the drop in American Aires' long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| American Aires vs. Benchmark Electronics | American Aires vs. Bel Fuse A | American Aires vs. Methode Electronics | American Aires vs. Bel Fuse B |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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