Correlation Between Lockheed Martin and Lgm Risk
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Lgm Risk 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 Lgm Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Lgm Risk Managed, you can compare the effects of market volatilities on Lockheed Martin and Lgm Risk 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 Lgm Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Lgm Risk.
Diversification Opportunities for Lockheed Martin and Lgm Risk
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lockheed and Lgm is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Lgm Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lgm Risk Managed 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 Lgm Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lgm Risk Managed has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Lgm Risk go up and down completely randomly.
Pair Corralation between Lockheed Martin and Lgm Risk
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Lgm Risk. In addition to that, Lockheed Martin is 4.09 times more volatile than Lgm Risk Managed. It trades about -0.2 of its total potential returns per unit of risk. Lgm Risk Managed is currently generating about 0.16 per unit of volatility. If you would invest 1,134 in Lgm Risk Managed on August 27, 2024 and sell it today you would earn a total of 13.00 from holding Lgm Risk Managed or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. Lgm Risk Managed
Performance |
| Timeline |
| Lockheed Martin |
| Lgm Risk Managed |
Lockheed Martin and Lgm Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Lgm Risk
The main advantage of trading using opposite Lockheed Martin and Lgm Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Lgm Risk 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 Lgm Risk will offset losses from the drop in Lgm Risk's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Lgm Risk vs. Artisan High Income | Lgm Risk vs. Morningstar Aggressive Growth | Lgm Risk vs. Franklin High Income | Lgm Risk vs. Ab Global Risk |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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