Correlation Between Lockheed Martin and CARSALESCOM
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and CARSALESCOM 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 CARSALESCOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and CARSALESCOM, you can compare the effects of market volatilities on Lockheed Martin and CARSALESCOM 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 CARSALESCOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and CARSALESCOM.
Diversification Opportunities for Lockheed Martin and CARSALESCOM
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lockheed and CARSALESCOM is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and CARSALESCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARSALESCOM 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 CARSALESCOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARSALESCOM has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and CARSALESCOM go up and down completely randomly.
Pair Corralation between Lockheed Martin and CARSALESCOM
Assuming the 90 days horizon Lockheed Martin is expected to generate 3.18 times less return on investment than CARSALESCOM. But when comparing it to its historical volatility, Lockheed Martin is 1.1 times less risky than CARSALESCOM. It trades about 0.09 of its potential returns per unit of risk. CARSALESCOM is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,180 in CARSALESCOM on October 25, 2024 and sell it today you would earn a total of 180.00 from holding CARSALESCOM or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Lockheed Martin vs. CARSALESCOM
Performance |
| Timeline |
| Lockheed Martin |
| CARSALESCOM |
Lockheed Martin and CARSALESCOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and CARSALESCOM
The main advantage of trading using opposite Lockheed Martin and CARSALESCOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, CARSALESCOM 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 CARSALESCOM will offset losses from the drop in CARSALESCOM's long position.| Lockheed Martin vs. CARSALESCOM | Lockheed Martin vs. Caseys General Stores | Lockheed Martin vs. AEON STORES | Lockheed Martin vs. 24SEVENOFFICE GROUP AB |
| CARSALESCOM vs. SHIP HEALTHCARE HLDGINC | CARSALESCOM vs. CVS Health | CARSALESCOM vs. Citic Telecom International | CARSALESCOM vs. COMBA TELECOM SYST |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |