Correlation Between Lockheed Martin and Millennium Group
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Millennium Group 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 Millennium Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Millennium Group International, you can compare the effects of market volatilities on Lockheed Martin and Millennium Group 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 Millennium Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Millennium Group.
Diversification Opportunities for Lockheed Martin and Millennium Group
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lockheed and Millennium is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Millennium Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millennium Group Int 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 Millennium Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millennium Group Int has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Millennium Group go up and down completely randomly.
Pair Corralation between Lockheed Martin and Millennium Group
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Millennium Group. But the stock apears to be less risky and, when comparing its historical volatility, Lockheed Martin is 2.28 times less risky than Millennium Group. The stock trades about -0.2 of its potential returns per unit of risk. The Millennium Group International is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 167.00 in Millennium Group International on August 27, 2024 and sell it today you would lose (7.00) from holding Millennium Group International or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. Millennium Group International
Performance |
| Timeline |
| Lockheed Martin |
| Millennium Group Int |
Lockheed Martin and Millennium Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Millennium Group
The main advantage of trading using opposite Lockheed Martin and Millennium Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Millennium Group 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 Millennium Group will offset losses from the drop in Millennium Group's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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