Correlation Between Lockheed Martin and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Meta Platforms 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 Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and Meta Platforms, you can compare the effects of market volatilities on Lockheed Martin and Meta Platforms 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 Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Meta Platforms.
Diversification Opportunities for Lockheed Martin and Meta Platforms
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lockheed and Meta is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms 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 Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Meta Platforms go up and down completely randomly.
Pair Corralation between Lockheed Martin and Meta Platforms
If you would invest 42,729 in Lockheed Martin on December 29, 2023 and sell it today you would earn a total of 2,949 from holding Lockheed Martin or generate 6.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Lockheed Martin vs. Meta Platforms
Performance |
Timeline |
Lockheed Martin |
Meta Platforms |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Lockheed Martin and Meta Platforms Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lockheed Martin and Meta Platforms
The main advantage of trading using opposite Lockheed Martin and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.Lockheed Martin vs. A2Z Smart Technologies | Lockheed Martin vs. Planet Labs PBC | Lockheed Martin vs. Draganfly | Lockheed Martin vs. Momentus |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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