Correlation Between Lockheed Martin and Telecom Argentina
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Telecom Argentina 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 Telecom Argentina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Telecom Argentina SA, you can compare the effects of market volatilities on Lockheed Martin and Telecom Argentina 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 Telecom Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Telecom Argentina.
Diversification Opportunities for Lockheed Martin and Telecom Argentina
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lockheed and Telecom is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Telecom Argentina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina 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 Telecom Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Argentina has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Telecom Argentina go up and down completely randomly.
Pair Corralation between Lockheed Martin and Telecom Argentina
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Telecom Argentina. But the stock apears to be less risky and, when comparing its historical volatility, Lockheed Martin is 1.47 times less risky than Telecom Argentina. The stock trades about -0.29 of its potential returns per unit of risk. The Telecom Argentina SA is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 1,207 in Telecom Argentina SA on November 18, 2024 and sell it today you would lose (98.00) from holding Telecom Argentina SA or give up 8.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. Telecom Argentina SA
Performance |
| Timeline |
| Lockheed Martin |
| Telecom Argentina |
Lockheed Martin and Telecom Argentina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Telecom Argentina
The main advantage of trading using opposite Lockheed Martin and Telecom Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Telecom Argentina 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 Telecom Argentina will offset losses from the drop in Telecom Argentina's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Telecom Argentina vs. Telefonica SA ADR | Telecom Argentina vs. SK Telecom Co | Telecom Argentina vs. America Movil SAB | Telecom Argentina vs. KT Corporation |
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 CEOs Directory module to screen CEOs from public companies around the world.
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