Correlation Between Lockheed Martin and RumbleON
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and RumbleON 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 RumbleON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and RumbleON, you can compare the effects of market volatilities on Lockheed Martin and RumbleON 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 RumbleON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and RumbleON.
Diversification Opportunities for Lockheed Martin and RumbleON
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lockheed and RumbleON is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and RumbleON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RumbleON 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 RumbleON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RumbleON has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and RumbleON go up and down completely randomly.
Pair Corralation between Lockheed Martin and RumbleON
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the RumbleON. But the stock apears to be less risky and, when comparing its historical volatility, Lockheed Martin is 3.66 times less risky than RumbleON. The stock trades about -0.2 of its potential returns per unit of risk. The RumbleON is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 543.00 in RumbleON on August 28, 2024 and sell it today you would earn a total of 25.00 from holding RumbleON or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. RumbleON
Performance |
| Timeline |
| Lockheed Martin |
| RumbleON |
Lockheed Martin and RumbleON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and RumbleON
The main advantage of trading using opposite Lockheed Martin and RumbleON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, RumbleON 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 RumbleON will offset losses from the drop in RumbleON's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| RumbleON vs. Group 1 Automotive | RumbleON vs. Penske Automotive Group | RumbleON vs. Lithia Motors | RumbleON vs. AutoNation |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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