Correlation Between Grupo Sports and Lockheed Martin
Can any of the company-specific risk be diversified away by investing in both Grupo Sports and Lockheed Martin 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 Grupo Sports and Lockheed Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Sports World and Lockheed Martin, you can compare the effects of market volatilities on Grupo Sports and Lockheed Martin 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 Grupo Sports with a short position of Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Sports and Lockheed Martin.
Diversification Opportunities for Grupo Sports and Lockheed Martin
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Lockheed is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Sports World and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and Grupo Sports 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 Grupo Sports World are associated (or correlated) with Lockheed Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lockheed Martin has no effect on the direction of Grupo Sports i.e., Grupo Sports and Lockheed Martin go up and down completely randomly.
Pair Corralation between Grupo Sports and Lockheed Martin
Assuming the 90 days trading horizon Grupo Sports World is expected to generate 1.63 times more return on investment than Lockheed Martin. However, Grupo Sports is 1.63 times more volatile than Lockheed Martin. It trades about 0.08 of its potential returns per unit of risk. Lockheed Martin is currently generating about 0.02 per unit of risk. If you would invest 293.00 in Grupo Sports World on September 12, 2024 and sell it today you would earn a total of 347.00 from holding Grupo Sports World or generate 118.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Sports World vs. Lockheed Martin
Performance |
| Timeline |
| Grupo Sports World |
| Lockheed Martin |
Grupo Sports and Lockheed Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Sports and Lockheed Martin
The main advantage of trading using opposite Grupo Sports and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Sports position performs unexpectedly, Lockheed Martin 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 Lockheed Martin will offset losses from the drop in Lockheed Martin's long position.| Grupo Sports vs. Grupo Profuturo SAB | Grupo Sports vs. Promotora y Operadora | Grupo Sports vs. Promotora y Operadora | Grupo Sports vs. The Select Sector |
| Lockheed Martin vs. Prudential Financial | Lockheed Martin vs. Delta Air Lines | Lockheed Martin vs. Deutsche Bank Aktiengesellschaft | Lockheed Martin vs. Grupo Sports World |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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