Correlation Between Lockheed Martin and Sligro Food
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Sligro Food 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 Sligro Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Sligro Food Group, you can compare the effects of market volatilities on Lockheed Martin and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Sligro Food.
Diversification Opportunities for Lockheed Martin and Sligro Food
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lockheed and Sligro is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Sligro Food go up and down completely randomly.
Pair Corralation between Lockheed Martin and Sligro Food
Considering the 90-day investment horizon Lockheed Martin is expected to generate 0.61 times more return on investment than Sligro Food. However, Lockheed Martin is 1.65 times less risky than Sligro Food. It trades about 0.09 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.07 per unit of risk. If you would invest 43,908 in Lockheed Martin on August 26, 2024 and sell it today you would earn a total of 10,314 from holding Lockheed Martin or generate 23.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. Sligro Food Group
Performance |
| Timeline |
| Lockheed Martin |
| Sligro Food Group |
Lockheed Martin and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Sligro Food
The main advantage of trading using opposite Lockheed Martin and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Sligro Food vs. Legacy Education | Sligro Food vs. NVIDIA | Sligro Food vs. Apple Inc | Sligro Food vs. Microsoft |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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