Correlation Between G2D Investments and Lockheed Martin
Can any of the company-specific risk be diversified away by investing in both G2D Investments 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 G2D Investments and Lockheed Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G2D Investments and Lockheed Martin, you can compare the effects of market volatilities on G2D Investments 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 G2D Investments with a short position of Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of G2D Investments and Lockheed Martin.
Diversification Opportunities for G2D Investments and Lockheed Martin
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between G2D and Lockheed is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding G2D Investments and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and G2D Investments 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 G2D Investments 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 G2D Investments i.e., G2D Investments and Lockheed Martin go up and down completely randomly.
Pair Corralation between G2D Investments and Lockheed Martin
Assuming the 90 days trading horizon G2D Investments is expected to under-perform the Lockheed Martin. In addition to that, G2D Investments is 1.53 times more volatile than Lockheed Martin. It trades about -0.1 of its total potential returns per unit of risk. Lockheed Martin is currently generating about -0.05 per unit of volatility. If you would invest 314,342 in Lockheed Martin on September 24, 2024 and sell it today you would lose (20,070) from holding Lockheed Martin or give up 6.38% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
G2D Investments vs. Lockheed Martin
Performance |
Timeline |
G2D Investments |
Lockheed Martin |
G2D Investments and Lockheed Martin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with G2D Investments and Lockheed Martin
The main advantage of trading using opposite G2D Investments and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G2D Investments 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.G2D Investments vs. BlackRock | G2D Investments vs. The Bank of | G2D Investments vs. Ameriprise Financial | G2D Investments vs. Banco BTG Pactual |
Lockheed Martin vs. G2D Investments | Lockheed Martin vs. Verizon Communications | Lockheed Martin vs. Unifique Telecomunicaes SA | Lockheed Martin vs. Nordon Indstrias Metalrgicas |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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