Correlation Between Lockheed Martin and Laser Energetics
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Laser Energetics 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 Laser Energetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Laser Energetics, you can compare the effects of market volatilities on Lockheed Martin and Laser Energetics 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 Laser Energetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Laser Energetics.
Diversification Opportunities for Lockheed Martin and Laser Energetics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lockheed and Laser is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Laser Energetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laser Energetics 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 Laser Energetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laser Energetics has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Laser Energetics go up and down completely randomly.
Pair Corralation between Lockheed Martin and Laser Energetics
Considering the 90-day investment horizon Lockheed Martin is expected to generate 51.91 times less return on investment than Laser Energetics. But when comparing it to its historical volatility, Lockheed Martin is 40.94 times less risky than Laser Energetics. It trades about 0.03 of its potential returns per unit of risk. Laser Energetics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Laser Energetics on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Laser Energetics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lockheed Martin vs. Laser Energetics
Performance |
| Timeline |
| Lockheed Martin |
| Laser Energetics |
Lockheed Martin and Laser Energetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Laser Energetics
The main advantage of trading using opposite Lockheed Martin and Laser Energetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Laser Energetics 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 Laser Energetics will offset losses from the drop in Laser Energetics' long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Laser Energetics vs. Northrop Grumman | Laser Energetics vs. Lockheed Martin | Laser Energetics vs. Raytheon Technologies Corp | Laser Energetics vs. L3Harris Technologies |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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