Correlation Between Lockheed Martin and Munivest Fund
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Munivest Fund 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 Munivest Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Munivest Fund, you can compare the effects of market volatilities on Lockheed Martin and Munivest Fund 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 Munivest Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Munivest Fund.
Diversification Opportunities for Lockheed Martin and Munivest Fund
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lockheed and Munivest is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Munivest Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Munivest Fund 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 Munivest Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Munivest Fund has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Munivest Fund go up and down completely randomly.
Pair Corralation between Lockheed Martin and Munivest Fund
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Munivest Fund. In addition to that, Lockheed Martin is 1.95 times more volatile than Munivest Fund. It trades about -0.2 of its total potential returns per unit of risk. Munivest Fund is currently generating about 0.12 per unit of volatility. If you would invest 719.00 in Munivest Fund on August 27, 2024 and sell it today you would earn a total of 13.00 from holding Munivest Fund or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. Munivest Fund
Performance |
| Timeline |
| Lockheed Martin |
| Munivest Fund |
Lockheed Martin and Munivest Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Munivest Fund
The main advantage of trading using opposite Lockheed Martin and Munivest Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Munivest Fund 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 Munivest Fund will offset losses from the drop in Munivest Fund's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Munivest Fund vs. DTF Tax Free | Munivest Fund vs. MFS High Yield | Munivest Fund vs. MFS High Income | Munivest Fund vs. John Hancock Income |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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