Correlation Between Lockheed Martin and Vestis
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Vestis 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 Vestis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Vestis, you can compare the effects of market volatilities on Lockheed Martin and Vestis 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 Vestis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Vestis.
Diversification Opportunities for Lockheed Martin and Vestis
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lockheed and Vestis is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Vestis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestis 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 Vestis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestis has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Vestis go up and down completely randomly.
Pair Corralation between Lockheed Martin and Vestis
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Vestis. But the stock apears to be less risky and, when comparing its historical volatility, Lockheed Martin is 2.12 times less risky than Vestis. The stock trades about -0.09 of its potential returns per unit of risk. The Vestis is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,522 in Vestis on August 26, 2024 and sell it today you would earn a total of 80.00 from holding Vestis or generate 5.26% 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. Vestis
Performance |
| Timeline |
| Lockheed Martin |
| Vestis |
Lockheed Martin and Vestis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Vestis
The main advantage of trading using opposite Lockheed Martin and Vestis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Vestis 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 Vestis will offset losses from the drop in Vestis' long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Vestis vs. PROG Holdings | Vestis vs. McGrath RentCorp | Vestis vs. Mega Matrix Corp | Vestis vs. FTAI Aviation Ltd |
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
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |