Correlation Between Lockheed Martin and Constellation Energy
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Constellation Energy 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 Constellation Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Constellation Energy Corp, you can compare the effects of market volatilities on Lockheed Martin and Constellation Energy 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 Constellation Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Constellation Energy.
Diversification Opportunities for Lockheed Martin and Constellation Energy
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lockheed and Constellation is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Constellation Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Energy Corp 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 Constellation Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Energy Corp has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Constellation Energy go up and down completely randomly.
Pair Corralation between Lockheed Martin and Constellation Energy
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Constellation Energy. But the stock apears to be less risky and, when comparing its historical volatility, Lockheed Martin is 2.27 times less risky than Constellation Energy. The stock trades about -0.29 of its potential returns per unit of risk. The Constellation Energy Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 31,636 in Constellation Energy Corp on November 18, 2024 and sell it today you would earn a total of 94.00 from holding Constellation Energy Corp or generate 0.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lockheed Martin vs. Constellation Energy Corp
Performance |
Timeline |
Lockheed Martin |
Constellation Energy Corp |
Lockheed Martin and Constellation Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lockheed Martin and Constellation Energy
The main advantage of trading using opposite Lockheed Martin and Constellation Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Constellation Energy 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 Constellation Energy will offset losses from the drop in Constellation Energy's long position.Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
Constellation Energy vs. Clearway Energy | Constellation Energy vs. Brookfield Renewable Corp | Constellation Energy vs. Brookfield Renewable Partners | Constellation Energy vs. Clearway Energy Class |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |