Correlation Between Lockheed Martin and Harbor Long
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Harbor Long 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 Harbor Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Harbor Long Term Growers, you can compare the effects of market volatilities on Lockheed Martin and Harbor Long 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 Harbor Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Harbor Long.
Diversification Opportunities for Lockheed Martin and Harbor Long
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lockheed and Harbor is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Harbor Long Term Growers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Long Term 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 Harbor Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Long Term has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Harbor Long go up and down completely randomly.
Pair Corralation between Lockheed Martin and Harbor Long
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the Harbor Long. In addition to that, Lockheed Martin is 1.2 times more volatile than Harbor Long Term Growers. It trades about -0.2 of its total potential returns per unit of risk. Harbor Long Term Growers is currently generating about 0.11 per unit of volatility. If you would invest 2,623 in Harbor Long Term Growers on August 28, 2024 and sell it today you would earn a total of 65.00 from holding Harbor Long Term Growers or generate 2.48% 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. Harbor Long Term Growers
Performance |
| Timeline |
| Lockheed Martin |
| Harbor Long Term |
Lockheed Martin and Harbor Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and Harbor Long
The main advantage of trading using opposite Lockheed Martin and Harbor Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Harbor Long 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 Harbor Long will offset losses from the drop in Harbor Long's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| Harbor Long vs. Invesco Dynamic Large | Harbor Long vs. Perella Weinberg Partners | Harbor Long vs. HUMANA INC | Harbor Long vs. Aquagold International |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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