Correlation Between United Airlines and Lockheed Martin
Can any of the company-specific risk be diversified away by investing in both United Airlines 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 United Airlines and Lockheed Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Airlines Holdings and Lockheed Martin, you can compare the effects of market volatilities on United Airlines 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 United Airlines with a short position of Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Lockheed Martin.
Diversification Opportunities for United Airlines and Lockheed Martin
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and Lockheed is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and United Airlines 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 United Airlines Holdings 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 United Airlines i.e., United Airlines and Lockheed Martin go up and down completely randomly.
Pair Corralation between United Airlines and Lockheed Martin
If you would invest 29,205 in United Airlines Holdings on November 2, 2024 and sell it today you would earn a total of 2,890 from holding United Airlines Holdings or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Lockheed Martin
Performance |
| Timeline |
| United Airlines Holdings |
| Lockheed Martin |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United Airlines and Lockheed Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Lockheed Martin
The main advantage of trading using opposite United Airlines and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines 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.| United Airlines vs. Martin Marietta Materials, | United Airlines vs. Electronic Arts | United Airlines vs. Verizon Communications | United Airlines vs. Vulcan Materials |
| Lockheed Martin vs. Microchip Technology Incorporated | Lockheed Martin vs. MAHLE Metal Leve | Lockheed Martin vs. Clover Health Investments, | Lockheed Martin vs. Broadridge Financial Solutions, |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |