Correlation Between Lockheed Martin and Cia De
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Cia De 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 Cia De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Cia de Ferro, you can compare the effects of market volatilities on Lockheed Martin and Cia De 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 Cia De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Cia De.
Diversification Opportunities for Lockheed Martin and Cia De
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lockheed and Cia is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Cia de Ferro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cia de Ferro 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 Cia De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cia de Ferro has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Cia De go up and down completely randomly.
Pair Corralation between Lockheed Martin and Cia De
Considering the 90-day investment horizon Lockheed Martin is expected to generate 10.22 times less return on investment than Cia De. But when comparing it to its historical volatility, Lockheed Martin is 13.36 times less risky than Cia De. It trades about 0.03 of its potential returns per unit of risk. Cia de Ferro is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,334 in Cia de Ferro on August 27, 2024 and sell it today you would lose (541.00) from holding Cia de Ferro or give up 40.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Lockheed Martin vs. Cia de Ferro
Performance |
| Timeline |
| Lockheed Martin |
| Cia de Ferro |
Lockheed Martin and Cia De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Cia De
The main advantage of trading using opposite Lockheed Martin and Cia De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Cia De 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 Cia De will offset losses from the drop in Cia De's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Cia De vs. Tupy SA | Cia De vs. Banco do Estado | Cia De vs. Unipar Carbocloro SA | Cia De vs. MAHLE Metal Leve |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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