Correlation Between Lockheed Martin and PTT Global
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and PTT Global 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 PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and PTT Global Chemical, you can compare the effects of market volatilities on Lockheed Martin and PTT Global 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 PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and PTT Global.
Diversification Opportunities for Lockheed Martin and PTT Global
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lockheed and PTT is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and PTT Global Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Global Chemical 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 PTT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Global Chemical has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and PTT Global go up and down completely randomly.
Pair Corralation between Lockheed Martin and PTT Global
Assuming the 90 days horizon Lockheed Martin is expected to generate 0.77 times more return on investment than PTT Global. However, Lockheed Martin is 1.29 times less risky than PTT Global. It trades about 0.0 of its potential returns per unit of risk. PTT Global Chemical is currently generating about -0.12 per unit of risk. If you would invest 49,616 in Lockheed Martin on September 4, 2024 and sell it today you would lose (181.00) from holding Lockheed Martin or give up 0.36% 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. PTT Global Chemical
Performance |
| Timeline |
| Lockheed Martin |
| PTT Global Chemical |
Lockheed Martin and PTT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and PTT Global
The main advantage of trading using opposite Lockheed Martin and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, PTT Global 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 PTT Global will offset losses from the drop in PTT Global's long position.| Lockheed Martin vs. PTT Global Chemical | Lockheed Martin vs. Soken Chemical Engineering | Lockheed Martin vs. Apollo Medical Holdings | Lockheed Martin vs. Diamyd Medical AB |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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