Correlation Between Lockheed Martin and KraneShares Trust
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and KraneShares Trust 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 KraneShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and KraneShares Trust, you can compare the effects of market volatilities on Lockheed Martin and KraneShares Trust 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 KraneShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and KraneShares Trust.
Diversification Opportunities for Lockheed Martin and KraneShares Trust
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lockheed and KraneShares is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and KraneShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Trust 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 KraneShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Trust has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and KraneShares Trust go up and down completely randomly.
Pair Corralation between Lockheed Martin and KraneShares Trust
Considering the 90-day investment horizon Lockheed Martin is expected to generate 1.13 times less return on investment than KraneShares Trust. In addition to that, Lockheed Martin is 2.51 times more volatile than KraneShares Trust. It trades about 0.03 of its total potential returns per unit of risk. KraneShares Trust is currently generating about 0.1 per unit of volatility. If you would invest 2,479 in KraneShares Trust on August 27, 2024 and sell it today you would earn a total of 220.00 from holding KraneShares Trust or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 40.73% |
| Values | Daily Returns |
Lockheed Martin vs. KraneShares Trust
Performance |
| Timeline |
| Lockheed Martin |
| KraneShares Trust |
Lockheed Martin and KraneShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and KraneShares Trust
The main advantage of trading using opposite Lockheed Martin and KraneShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, KraneShares Trust 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 KraneShares Trust will offset losses from the drop in KraneShares Trust's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| KraneShares Trust vs. iShares Dividend and | KraneShares Trust vs. Martin Currie Sustainable | KraneShares Trust vs. VictoryShares THB Mid | KraneShares Trust vs. Mast Global Battery |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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