Correlation Between Lockheed Martin and Ethereum
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Ethereum 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 Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Ethereum, you can compare the effects of market volatilities on Lockheed Martin and Ethereum 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 Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Ethereum.
Diversification Opportunities for Lockheed Martin and Ethereum
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lockheed and Ethereum is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Ethereum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethereum 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 Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethereum has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Ethereum go up and down completely randomly.
Pair Corralation between Lockheed Martin and Ethereum
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Ethereum. But the stock apears to be less risky and, when comparing its historical volatility, Lockheed Martin is 3.75 times less risky than Ethereum. The stock trades about -0.19 of its potential returns per unit of risk. The Ethereum is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 253,454 in Ethereum on August 24, 2024 and sell it today you would earn a total of 83,156 from holding Ethereum or generate 32.81% 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. Ethereum
Performance |
| Timeline |
| Lockheed Martin |
| Ethereum |
Lockheed Martin and Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Ethereum
The main advantage of trading using opposite Lockheed Martin and Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Ethereum 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 Ethereum will offset losses from the drop in Ethereum'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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |