Correlation Between DAX Index and Lockheed Martin
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By analyzing existing cross correlation between DAX Index and Lockheed Martin, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Lockheed Martin.
Diversification Opportunities for DAX Index and Lockheed Martin
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAX and Lockheed is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Lockheed Martin go up and down completely randomly.
Pair Corralation between DAX Index and Lockheed Martin
Assuming the 90 days trading horizon DAX Index is expected to generate 0.54 times more return on investment than Lockheed Martin. However, DAX Index is 1.87 times less risky than Lockheed Martin. It trades about 0.18 of its potential returns per unit of risk. Lockheed Martin is currently generating about -0.06 per unit of risk. If you would invest 1,863,311 in DAX Index on September 15, 2024 and sell it today you would earn a total of 177,281 from holding DAX Index or generate 9.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.48% |
Values | Daily Returns |
DAX Index vs. Lockheed Martin
Performance |
Timeline |
DAX Index and Lockheed Martin Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
Lockheed Martin
Pair trading matchups for Lockheed Martin
Pair Trading with DAX Index and Lockheed Martin
The main advantage of trading using opposite DAX Index and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.DAX Index vs. Flutter Entertainment PLC | DAX Index vs. LG Display Co | DAX Index vs. TOWNSQUARE MEDIA INC | DAX Index vs. Prosiebensat 1 Media |
Lockheed Martin vs. Airbus SE | Lockheed Martin vs. Superior Plus Corp | Lockheed Martin vs. Origin Agritech | Lockheed Martin vs. INTUITIVE SURGICAL |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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