Correlation Between Lockheed Martin and Invesco CurrencyShares
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Invesco CurrencyShares 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 Invesco CurrencyShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Invesco CurrencyShares Euro, you can compare the effects of market volatilities on Lockheed Martin and Invesco CurrencyShares 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 Invesco CurrencyShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Invesco CurrencyShares.
Diversification Opportunities for Lockheed Martin and Invesco CurrencyShares
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lockheed and Invesco is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Invesco CurrencyShares Euro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco CurrencyShares 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 Invesco CurrencyShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco CurrencyShares has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Invesco CurrencyShares go up and down completely randomly.
Pair Corralation between Lockheed Martin and Invesco CurrencyShares
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Invesco CurrencyShares. In addition to that, Lockheed Martin is 1.72 times more volatile than Invesco CurrencyShares Euro. It trades about -0.19 of its total potential returns per unit of risk. Invesco CurrencyShares Euro is currently generating about 0.09 per unit of volatility. If you would invest 199,166 in Invesco CurrencyShares Euro on August 24, 2024 and sell it today you would earn a total of 2,579 from holding Invesco CurrencyShares Euro or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Lockheed Martin vs. Invesco CurrencyShares Euro
Performance |
| Timeline |
| Lockheed Martin |
| Invesco CurrencyShares |
Lockheed Martin and Invesco CurrencyShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Invesco CurrencyShares
The main advantage of trading using opposite Lockheed Martin and Invesco CurrencyShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Invesco CurrencyShares 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 Invesco CurrencyShares will offset losses from the drop in Invesco CurrencyShares' long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Invesco CurrencyShares vs. Vanguard Index Funds | Invesco CurrencyShares vs. Vanguard Index Funds | Invesco CurrencyShares vs. Vanguard STAR Funds | Invesco CurrencyShares vs. SPDR SP 500 |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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