Correlation Between Lockheed Martin and Qinetiq Group
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Qinetiq Group 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 Qinetiq Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Qinetiq Group PLC, you can compare the effects of market volatilities on Lockheed Martin and Qinetiq Group 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 Qinetiq Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Qinetiq Group.
Diversification Opportunities for Lockheed Martin and Qinetiq Group
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lockheed and Qinetiq is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Qinetiq Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qinetiq Group 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 Qinetiq Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qinetiq Group PLC has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Qinetiq Group go up and down completely randomly.
Pair Corralation between Lockheed Martin and Qinetiq Group
Considering the 90-day investment horizon Lockheed Martin is expected to generate 0.62 times more return on investment than Qinetiq Group. However, Lockheed Martin is 1.62 times less risky than Qinetiq Group. It trades about -0.12 of its potential returns per unit of risk. Qinetiq Group PLC is currently generating about -0.1 per unit of risk. If you would invest 56,473 in Lockheed Martin on September 12, 2024 and sell it today you would lose (6,049) from holding Lockheed Martin or give up 10.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Lockheed Martin vs. Qinetiq Group PLC
Performance |
| Timeline |
| Lockheed Martin |
| Qinetiq Group PLC |
Lockheed Martin and Qinetiq Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Qinetiq Group
The main advantage of trading using opposite Lockheed Martin and Qinetiq Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Qinetiq Group 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 Qinetiq Group will offset losses from the drop in Qinetiq Group's long position.| Lockheed Martin vs. Novocure | Lockheed Martin vs. HubSpot | Lockheed Martin vs. DigitalOcean Holdings | Lockheed Martin vs. Appian Corp |
| Qinetiq Group vs. Northrop Grumman | Qinetiq Group vs. L3Harris Technologies | Qinetiq Group vs. General Dynamics | Qinetiq Group vs. Curtiss Wright |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |