Correlation Between Lockheed Martin and Reservoir Media
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Reservoir Media 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 Reservoir Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Reservoir Media, you can compare the effects of market volatilities on Lockheed Martin and Reservoir Media 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 Reservoir Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Reservoir Media.
Diversification Opportunities for Lockheed Martin and Reservoir Media
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lockheed and Reservoir is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Reservoir Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reservoir Media 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 Reservoir Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reservoir Media has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Reservoir Media go up and down completely randomly.
Pair Corralation between Lockheed Martin and Reservoir Media
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Reservoir Media. But the stock apears to be less risky and, when comparing its historical volatility, Lockheed Martin is 2.02 times less risky than Reservoir Media. The stock trades about -0.29 of its potential returns per unit of risk. The Reservoir Media is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 864.00 in Reservoir Media on August 23, 2024 and sell it today you would earn a total of 25.00 from holding Reservoir Media or generate 2.89% 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. Reservoir Media
Performance |
| Timeline |
| Lockheed Martin |
| Reservoir Media |
Lockheed Martin and Reservoir Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Reservoir Media
The main advantage of trading using opposite Lockheed Martin and Reservoir Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Reservoir Media 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 Reservoir Media will offset losses from the drop in Reservoir Media's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Reservoir Media vs. Roku Inc | Reservoir Media vs. AMC Entertainment Holdings | Reservoir Media vs. Paramount Global Class | Reservoir Media vs. Warner Bros Discovery |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |