Correlation Between Lockheed Martin and Eerly Govt
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Eerly Govt 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 Eerly Govt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Eerly Govt Ppty, you can compare the effects of market volatilities on Lockheed Martin and Eerly Govt 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 Eerly Govt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Eerly Govt.
Diversification Opportunities for Lockheed Martin and Eerly Govt
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lockheed and Eerly is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Eerly Govt Ppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eerly Govt Ppty 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 Eerly Govt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eerly Govt Ppty has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Eerly Govt go up and down completely randomly.
Pair Corralation between Lockheed Martin and Eerly Govt
Considering the 90-day investment horizon Lockheed Martin is expected to generate 1.05 times more return on investment than Eerly Govt. However, Lockheed Martin is 1.05 times more volatile than Eerly Govt Ppty. It trades about -0.2 of its potential returns per unit of risk. Eerly Govt Ppty is currently generating about -0.28 per unit of risk. If you would invest 55,517 in Lockheed Martin on August 27, 2024 and sell it today you would lose (3,328) from holding Lockheed Martin or give up 5.99% 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. Eerly Govt Ppty
Performance |
| Timeline |
| Lockheed Martin |
| Eerly Govt Ppty |
Lockheed Martin and Eerly Govt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Eerly Govt
The main advantage of trading using opposite Lockheed Martin and Eerly Govt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Eerly Govt 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 Eerly Govt will offset losses from the drop in Eerly Govt's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Eerly Govt vs. Equity Commonwealth | Eerly Govt vs. Highwoods Properties | Eerly Govt vs. Piedmont Office Realty | Eerly Govt vs. Brandywine Realty Trust |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |