Correlation Between Lockheed Martin and Verra Mobility
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Verra Mobility 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 Verra Mobility into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Verra Mobility Corp, you can compare the effects of market volatilities on Lockheed Martin and Verra Mobility 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 Verra Mobility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Verra Mobility.
Diversification Opportunities for Lockheed Martin and Verra Mobility
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lockheed and Verra is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Verra Mobility Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verra Mobility Corp 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 Verra Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verra Mobility Corp has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Verra Mobility go up and down completely randomly.
Pair Corralation between Lockheed Martin and Verra Mobility
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Verra Mobility. In addition to that, Lockheed Martin is 2.1 times more volatile than Verra Mobility Corp. It trades about -0.29 of its total potential returns per unit of risk. Verra Mobility Corp is currently generating about 0.15 per unit of volatility. If you would invest 2,548 in Verra Mobility Corp on November 18, 2024 and sell it today you would earn a total of 85.00 from holding Verra Mobility Corp or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. Verra Mobility Corp
Performance |
| Timeline |
| Lockheed Martin |
| Verra Mobility Corp |
Lockheed Martin and Verra Mobility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Verra Mobility
The main advantage of trading using opposite Lockheed Martin and Verra Mobility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Verra Mobility 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 Verra Mobility will offset losses from the drop in Verra Mobility's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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