Correlation Between Lockheed Martin and Mirriad Advertising
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Mirriad Advertising 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 Mirriad Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Mirriad Advertising plc, you can compare the effects of market volatilities on Lockheed Martin and Mirriad Advertising 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 Mirriad Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Mirriad Advertising.
Diversification Opportunities for Lockheed Martin and Mirriad Advertising
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lockheed and Mirriad is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Mirriad Advertising plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirriad Advertising plc 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 Mirriad Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirriad Advertising plc has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Mirriad Advertising go up and down completely randomly.
Pair Corralation between Lockheed Martin and Mirriad Advertising
Considering the 90-day investment horizon Lockheed Martin is expected to generate 0.14 times more return on investment than Mirriad Advertising. However, Lockheed Martin is 7.2 times less risky than Mirriad Advertising. It trades about 0.04 of its potential returns per unit of risk. Mirriad Advertising plc is currently generating about -0.03 per unit of risk. If you would invest 44,785 in Lockheed Martin on August 27, 2024 and sell it today you would earn a total of 9,437 from holding Lockheed Martin or generate 21.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. Mirriad Advertising plc
Performance |
| Timeline |
| Lockheed Martin |
| Mirriad Advertising plc |
Lockheed Martin and Mirriad Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Mirriad Advertising
The main advantage of trading using opposite Lockheed Martin and Mirriad Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Mirriad Advertising 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 Mirriad Advertising will offset losses from the drop in Mirriad Advertising's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Mirriad Advertising vs. INEO Tech Corp | Mirriad Advertising vs. Kidoz Inc | Mirriad Advertising vs. Marchex | Mirriad Advertising vs. Snipp Interactive |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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