Correlation Between Lockheed Martin and ClearBridge Large
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and ClearBridge Large 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 ClearBridge Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and ClearBridge Large Cap, you can compare the effects of market volatilities on Lockheed Martin and ClearBridge Large 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 ClearBridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and ClearBridge Large.
Diversification Opportunities for Lockheed Martin and ClearBridge Large
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lockheed and ClearBridge is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and ClearBridge Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearBridge Large Cap 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 ClearBridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearBridge Large Cap has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and ClearBridge Large go up and down completely randomly.
Pair Corralation between Lockheed Martin and ClearBridge Large
Considering the 90-day investment horizon Lockheed Martin is expected to generate 1.22 times more return on investment than ClearBridge Large. However, Lockheed Martin is 1.22 times more volatile than ClearBridge Large Cap. It trades about 0.13 of its potential returns per unit of risk. ClearBridge Large Cap is currently generating about 0.11 per unit of risk. If you would invest 45,288 in Lockheed Martin on August 24, 2024 and sell it today you would earn a total of 8,913 from holding Lockheed Martin or generate 19.68% 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. ClearBridge Large Cap
Performance |
| Timeline |
| Lockheed Martin |
| ClearBridge Large Cap |
Lockheed Martin and ClearBridge Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and ClearBridge Large
The main advantage of trading using opposite Lockheed Martin and ClearBridge Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, ClearBridge Large 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 ClearBridge Large will offset losses from the drop in ClearBridge Large's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| ClearBridge Large vs. Vanguard Russell 1000 | ClearBridge Large vs. Vanguard Russell 2000 | ClearBridge Large vs. Vanguard Mega Cap | ClearBridge Large vs. Vanguard Russell 1000 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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