Correlation Between Lockheed Martin and ProShares
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and ProShares 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 ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and ProShares SP 500, you can compare the effects of market volatilities on Lockheed Martin and ProShares 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 ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and ProShares.
Diversification Opportunities for Lockheed Martin and ProShares
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lockheed and ProShares is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and ProShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP 500 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 ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP 500 has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and ProShares go up and down completely randomly.
Pair Corralation between Lockheed Martin and ProShares
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the ProShares. In addition to that, Lockheed Martin is 1.81 times more volatile than ProShares SP 500. It trades about -0.09 of its total potential returns per unit of risk. ProShares SP 500 is currently generating about 0.11 per unit of volatility. If you would invest 10,546 in ProShares SP 500 on August 27, 2024 and sell it today you would earn a total of 150.00 from holding ProShares SP 500 or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. ProShares SP 500
Performance |
| Timeline |
| Lockheed Martin |
| ProShares SP 500 |
Lockheed Martin and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and ProShares
The main advantage of trading using opposite Lockheed Martin and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, ProShares 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 ProShares will offset losses from the drop in ProShares' long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| ProShares vs. BlackRock ETF Trust | ProShares vs. Rbb Fund | ProShares vs. Virtus ETF Trust | ProShares vs. Amplify CWP Enhanced |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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