Correlation Between Lockheed Martin and IShares Core
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and IShares Core 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 IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and iShares Core Aggregate, you can compare the effects of market volatilities on Lockheed Martin and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and IShares Core.
Diversification Opportunities for Lockheed Martin and IShares Core
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lockheed and IShares is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and iShares Core Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Aggregate 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Aggregate has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and IShares Core go up and down completely randomly.
Pair Corralation between Lockheed Martin and IShares Core
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the IShares Core. In addition to that, Lockheed Martin is 3.53 times more volatile than iShares Core Aggregate. It trades about -0.29 of its total potential returns per unit of risk. iShares Core Aggregate is currently generating about -0.1 per unit of volatility. If you would invest 9,854 in iShares Core Aggregate on August 23, 2024 and sell it today you would lose (75.00) from holding iShares Core Aggregate or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. iShares Core Aggregate
Performance |
| Timeline |
| Lockheed Martin |
| iShares Core Aggregate |
Lockheed Martin and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and IShares Core
The main advantage of trading using opposite Lockheed Martin and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| IShares Core vs. iShares MSCI EAFE | IShares Core vs. iShares iBoxx Investment | IShares Core vs. iShares TIPS Bond | IShares Core vs. iShares 1 3 Year |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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