Correlation Between Lockheed Martin and Hesai Group
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Hesai Group 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 Hesai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Hesai Group American, you can compare the effects of market volatilities on Lockheed Martin and Hesai Group 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 Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Hesai Group.
Diversification Opportunities for Lockheed Martin and Hesai Group
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lockheed and Hesai is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American 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 Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Hesai Group go up and down completely randomly.
Pair Corralation between Lockheed Martin and Hesai Group
Considering the 90-day investment horizon Lockheed Martin is expected to generate 57.38 times less return on investment than Hesai Group. But when comparing it to its historical volatility, Lockheed Martin is 43.28 times less risky than Hesai Group. It trades about 0.03 of its potential returns per unit of risk. Hesai Group American is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Hesai Group American on August 26, 2024 and sell it today you would earn a total of 474.00 from holding Hesai Group American or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.15% |
| Values | Daily Returns |
Lockheed Martin vs. Hesai Group American
Performance |
| Timeline |
| Lockheed Martin |
| Hesai Group American |
Lockheed Martin and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Hesai Group
The main advantage of trading using opposite Lockheed Martin and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Hesai Group 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 Hesai Group will offset losses from the drop in Hesai Group's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
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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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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