Correlation Between Lockheed Martin and Aqr Long-short
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Aqr Long-short 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 Aqr Long-short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Aqr Long Short Equity, you can compare the effects of market volatilities on Lockheed Martin and Aqr Long-short 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 Aqr Long-short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Aqr Long-short.
Diversification Opportunities for Lockheed Martin and Aqr Long-short
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lockheed and Aqr is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Aqr Long Short Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Long Short 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 Aqr Long-short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Long Short has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Aqr Long-short go up and down completely randomly.
Pair Corralation between Lockheed Martin and Aqr Long-short
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Aqr Long-short. In addition to that, Lockheed Martin is 2.59 times more volatile than Aqr Long Short Equity. It trades about -0.19 of its total potential returns per unit of risk. Aqr Long Short Equity is currently generating about 0.46 per unit of volatility. If you would invest 1,565 in Aqr Long Short Equity on August 24, 2024 and sell it today you would earn a total of 72.00 from holding Aqr Long Short Equity or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lockheed Martin vs. Aqr Long Short Equity
Performance |
| Timeline |
| Lockheed Martin |
| Aqr Long Short |
Lockheed Martin and Aqr Long-short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Aqr Long-short
The main advantage of trading using opposite Lockheed Martin and Aqr Long-short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Aqr Long-short 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 Aqr Long-short will offset losses from the drop in Aqr Long-short's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Aqr Long-short vs. Mid Cap Growth | Aqr Long-short vs. Growth Fund Of | Aqr Long-short vs. Artisan Small Cap | Aqr Long-short vs. T Rowe Price |
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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