Correlation Between Lockheed Martin and Moelis
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Moelis 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 Moelis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Moelis Co, you can compare the effects of market volatilities on Lockheed Martin and Moelis 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 Moelis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Moelis.
Diversification Opportunities for Lockheed Martin and Moelis
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lockheed and Moelis is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Moelis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moelis 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 Moelis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moelis has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Moelis go up and down completely randomly.
Pair Corralation between Lockheed Martin and Moelis
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Moelis. But the stock apears to be less risky and, when comparing its historical volatility, Lockheed Martin is 3.64 times less risky than Moelis. The stock trades about -0.19 of its potential returns per unit of risk. The Moelis Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,763 in Moelis Co on August 24, 2024 and sell it today you would earn a total of 701.00 from holding Moelis Co or generate 10.37% 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. Moelis Co
Performance |
| Timeline |
| Lockheed Martin |
| Moelis |
Lockheed Martin and Moelis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Moelis
The main advantage of trading using opposite Lockheed Martin and Moelis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Moelis 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 Moelis will offset losses from the drop in Moelis' long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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