Correlation Between Lockheed Martin and EAST AFRICAN
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By analyzing existing cross correlation between Lockheed Martin and EAST AFRICAN BREWERIES, you can compare the effects of market volatilities on Lockheed Martin and EAST AFRICAN 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 EAST AFRICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and EAST AFRICAN.
Diversification Opportunities for Lockheed Martin and EAST AFRICAN
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lockheed and EAST is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and EAST AFRICAN BREWERIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAST AFRICAN BREWERIES 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 EAST AFRICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EAST AFRICAN BREWERIES has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and EAST AFRICAN go up and down completely randomly.
Pair Corralation between Lockheed Martin and EAST AFRICAN
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the EAST AFRICAN. But the stock apears to be less risky and, when comparing its historical volatility, Lockheed Martin is 1.3 times less risky than EAST AFRICAN. The stock trades about -0.2 of its potential returns per unit of risk. The EAST AFRICAN BREWERIES is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 17,500 in EAST AFRICAN BREWERIES on August 28, 2024 and sell it today you would earn a total of 500.00 from holding EAST AFRICAN BREWERIES or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lockheed Martin vs. EAST AFRICAN BREWERIES
Performance |
| Timeline |
| Lockheed Martin |
| EAST AFRICAN BREWERIES |
Lockheed Martin and EAST AFRICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and EAST AFRICAN
The main advantage of trading using opposite Lockheed Martin and EAST AFRICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, EAST AFRICAN 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 EAST AFRICAN will offset losses from the drop in EAST AFRICAN's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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