Correlation Between Lockheed Martin and Hain Celestial
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Hain Celestial 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 Hain Celestial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and The Hain Celestial, you can compare the effects of market volatilities on Lockheed Martin and Hain Celestial 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 Hain Celestial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Hain Celestial.
Diversification Opportunities for Lockheed Martin and Hain Celestial
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lockheed and Hain is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and The Hain Celestial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hain Celestial 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 Hain Celestial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hain Celestial has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Hain Celestial go up and down completely randomly.
Pair Corralation between Lockheed Martin and Hain Celestial
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Hain Celestial. But the stock apears to be less risky and, when comparing its historical volatility, Lockheed Martin is 3.52 times less risky than Hain Celestial. The stock trades about -0.2 of its potential returns per unit of risk. The The Hain Celestial is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 885.00 in The Hain Celestial on August 27, 2024 and sell it today you would lose (27.00) from holding The Hain Celestial or give up 3.05% 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. The Hain Celestial
Performance |
| Timeline |
| Lockheed Martin |
| Hain Celestial |
Lockheed Martin and Hain Celestial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Hain Celestial
The main advantage of trading using opposite Lockheed Martin and Hain Celestial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Hain Celestial 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 Hain Celestial will offset losses from the drop in Hain Celestial's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Hain Celestial vs. J J Snack | Hain Celestial vs. Lancaster Colony | Hain Celestial vs. Treehouse Foods | Hain Celestial vs. Simply Good Foods |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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