Correlation Between Lockheed Martin and Nova Vision
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Nova Vision 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 Nova Vision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Nova Vision Acquisition, you can compare the effects of market volatilities on Lockheed Martin and Nova Vision 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 Nova Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Nova Vision.
Diversification Opportunities for Lockheed Martin and Nova Vision
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lockheed and Nova is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Nova Vision Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Vision Acquisition 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 Nova Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Vision Acquisition has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Nova Vision go up and down completely randomly.
Pair Corralation between Lockheed Martin and Nova Vision
If you would invest 1.50 in Nova Vision Acquisition on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Nova Vision Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Lockheed Martin vs. Nova Vision Acquisition
Performance |
| Timeline |
| Lockheed Martin |
| Nova Vision Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lockheed Martin and Nova Vision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Nova Vision
The main advantage of trading using opposite Lockheed Martin and Nova Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Nova Vision 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 Nova Vision will offset losses from the drop in Nova Vision's 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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