Correlation Between Lockheed Martin and Randon SA
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Randon SA 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 Randon SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Randon SA Implementos, you can compare the effects of market volatilities on Lockheed Martin and Randon SA 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 Randon SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Randon SA.
Diversification Opportunities for Lockheed Martin and Randon SA
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lockheed and Randon is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Randon SA Implementos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Randon SA Implementos 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 Randon SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Randon SA Implementos has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Randon SA go up and down completely randomly.
Pair Corralation between Lockheed Martin and Randon SA
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Randon SA. In addition to that, Lockheed Martin is 1.12 times more volatile than Randon SA Implementos. It trades about -0.29 of its total potential returns per unit of risk. Randon SA Implementos is currently generating about 0.31 per unit of volatility. If you would invest 746.00 in Randon SA Implementos on November 18, 2024 and sell it today you would earn a total of 108.00 from holding Randon SA Implementos or generate 14.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lockheed Martin vs. Randon SA Implementos
Performance |
| Timeline |
| Lockheed Martin |
| Randon SA Implementos |
Lockheed Martin and Randon SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Randon SA
The main advantage of trading using opposite Lockheed Martin and Randon SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Randon SA 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 Randon SA will offset losses from the drop in Randon SA's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Randon SA vs. Marcopolo SA | Randon SA vs. Randon SA Implementos | Randon SA vs. Fras le SA | Randon SA vs. Indstrias Romi SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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