Correlation Between Lockheed Martin and Kunlun Energy
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Kunlun Energy 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 Kunlun Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Kunlun Energy, you can compare the effects of market volatilities on Lockheed Martin and Kunlun Energy 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 Kunlun Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Kunlun Energy.
Diversification Opportunities for Lockheed Martin and Kunlun Energy
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lockheed and Kunlun is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Kunlun Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunlun Energy 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 Kunlun Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunlun Energy has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Kunlun Energy go up and down completely randomly.
Pair Corralation between Lockheed Martin and Kunlun Energy
If you would invest 96.00 in Kunlun Energy on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Kunlun Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. Kunlun Energy
Performance |
| Timeline |
| Lockheed Martin |
| Kunlun Energy |
Lockheed Martin and Kunlun Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Kunlun Energy
The main advantage of trading using opposite Lockheed Martin and Kunlun Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Kunlun Energy 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 Kunlun Energy will offset losses from the drop in Kunlun Energy's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Kunlun Energy vs. Bill Com Holdings | Kunlun Energy vs. Chemours Co | Kunlun Energy vs. Rumble Inc | Kunlun Energy vs. Parker Hannifin |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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