Lockheed Martin Stock Volatility
| LMT Stock | USD 453.08 2.68 0.60% |
We consider Lockheed Martin very steady. Lockheed Martin has Sharpe Ratio of 0.0043, which conveys that the firm had a 0.0043% return per unit of risk over the last 3 months. We have found twenty-nine technical indicators for Lockheed Martin, which you can use to evaluate the volatility of the firm. Please verify Lockheed Martin's Mean Deviation of 0.6621, downside deviation of 1.11, and Risk Adjusted Performance of 0.0086 to check out if the risk estimate we provide is consistent with the expected return of 0.004%. Key indicators related to Lockheed Martin's volatility include:
720 Days Market Risk | Chance Of Distress | 720 Days Economic Sensitivity |
Lockheed Martin Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Lockheed daily returns, and it is calculated using variance and standard deviation. We also use Lockheed's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Lockheed Martin volatility.
Lockheed |
ESG Sustainability
While most ESG disclosures are voluntary, Lockheed Martin's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Lockheed Martin's managers and investors.Environment Score | Governance Score | Social Score |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Lockheed Martin can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Lockheed Martin at lower prices. For example, an investor can purchase Lockheed stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of Lockheed Martin's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.
Moving together with Lockheed Stock
Moving against Lockheed Stock
| 0.68 | AZ | A2Z Smart Technologies | PairCorr |
| 0.64 | AIR | AAR Corp Financial Report 16th of July 2024 | PairCorr |
| 0.57 | CVU | CPI Aerostructures | PairCorr |
Lockheed Martin Market Sensitivity And Downside Risk
Lockheed Martin's beta coefficient measures the volatility of Lockheed stock compared to the systematic risk of the entire market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Lockheed stock's returns against your selected market. In other words, Lockheed Martin's beta of 0.19 provides an investor with an approximation of how much risk Lockheed Martin stock can potentially add to one of your existing portfolios. Lockheed Martin has relatively low volatility with skewness of -1.04 and kurtosis of 5.19. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Lockheed Martin's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Lockheed Martin's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different financial instruments as prices fall.
3 Months Beta |Analyze Lockheed Martin Demand TrendCheck current 90 days Lockheed Martin correlation with market (NYSE Composite)Lockheed Beta |
Lockheed standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. A typical volatile entity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.
Standard Deviation | 0.92 |
It is essential to understand the difference between upside risk (as represented by Lockheed Martin's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Lockheed Martin's daily returns or price. Since the actual investment returns on holding a position in lockheed stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Lockheed Martin.
Using Lockheed Put Option to Manage Risk
Put options written on Lockheed Martin grant holders of the option the right to sell a specified amount of Lockheed Martin at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of Lockheed Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Lockheed Martin's position is by buying a put option against it. The put option used this way is usually referred to as insurance. If an undesired outcome occurs and loss on holding Lockheed Martin will be realized, the loss incurred will be offset by the profits made with the option trade.
Lockheed Martin's PUT expiring on 2024-04-19
Profit |
| Lockheed Martin Price At Expiration |
Current Lockheed Martin Insurance Chain
| Delta | Gamma | Open Int | Expiration | Current Spread | Last Price | |||
Put | 2024-04-19 PUT at $325.0 | -0.0029 | 2.0E-4 | 1 | 2024-04-19 | 0.0 - 1.05 | 0.05 | View |
Put | 2024-04-19 PUT at $355.0 | -0.0025 | 2.0E-4 | 3 | 2024-04-19 | 0.0 - 0.05 | 0.03 | View |
Put | 2024-04-19 PUT at $400.0 | -0.0066 | 8.0E-4 | 64 | 2024-04-19 | 0.0 - 0.05 | 0.05 | View |
Put | 2024-04-19 PUT at $405.0 | -0.0072 | 9.0E-4 | 70 | 2024-04-19 | 0.0 - 0.05 | 0.05 | View |
Put | 2024-04-19 PUT at $410.0 | -0.0079 | 0.0011 | 79 | 2024-04-19 | 0.05 - 0.1 | 0.05 | View |
Put | 2024-04-19 PUT at $415.0 | -0.0087 | 0.0014 | 190 | 2024-04-19 | 0.0 - 0.5 | 0.05 | View |
Put | 2024-04-19 PUT at $417.5 | -0.0158 | 0.0023 | 4 | 2024-04-19 | 0.0 - 0.15 | 0.1 | View |
Put | 2024-04-19 PUT at $420.0 | -0.0228 | 0.0031 | 262 | 2024-04-19 | 0.0 - 0.25 | 0.15 | View |
Put | 2024-04-19 PUT at $422.5 | -0.0242 | 0.0035 | 51 | 2024-04-19 | 0.1 - 0.4 | 0.15 | View |
Put | 2024-04-19 PUT at $425.0 | -0.033 | 0.0046 | 653 | 2024-04-19 | 0.05 - 0.45 | 0.21 | View |
Put | 2024-04-19 PUT at $427.5 | -0.0401 | 0.0057 | 44 | 2024-04-19 | 0.05 - 0.4 | 0.25 | View |
Lockheed Martin Stock Volatility Analysis
Volatility refers to the frequency at which Lockheed Martin stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Lockheed Martin's price changes. Investors will then calculate the volatility of Lockheed Martin's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Lockheed Martin's volatility:
Historical Volatility
This type of stock volatility measures Lockheed Martin's fluctuations based on previous trends. It's commonly used to predict Lockheed Martin's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.Implied Volatility
This type of volatility provides a positive outlook on future price fluctuations for Lockheed Martin's current market price. This means that the stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Lockheed Martin's to be redeemed at a future date.Transformation |
The output start index for this execution was zero with a total number of output elements of sixty-one. Lockheed Martin Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
Lockheed Martin Projected Return Density Against Market
Considering the 90-day investment horizon Lockheed Martin has a beta of 0.1907 . This indicates as returns on the market go up, Lockheed Martin average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Lockheed Martin will be expected to be much smaller as well.Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Lockheed Martin or Aerospace & Defense sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Lockheed Martin's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Lockheed stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
Lockheed Martin has a negative alpha, implying that the risk taken by holding this instrument is not justified. The company is significantly underperforming the NYSE Composite. Predicted Return Density |
| Returns |
What Drives a Lockheed Martin Price Volatility?
Several factors can influence a stock's market volatility:Industry
Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.Political and Economic environment
When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.The Company's Performance
Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.Lockheed Martin Stock Risk Measures
Considering the 90-day investment horizon the coefficient of variation of Lockheed Martin is 23285.95. The daily returns are distributed with a variance of 0.85 and standard deviation of 0.92. The mean deviation of Lockheed Martin is currently at 0.63. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.63
α | Alpha over NYSE Composite | -0.01 | |
β | Beta against NYSE Composite | 0.19 | |
σ | Overall volatility | 0.92 | |
Ir | Information ratio | -0.06 |
Lockheed Martin Stock Return Volatility
Lockheed Martin historical daily return volatility represents how much of Lockheed Martin stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm has volatility of 0.9203% on return distribution over 90 days investment horizon. By contrast, NYSE Composite accepts 0.6196% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Lockheed Martin Volatility
Volatility is a rate at which the price of Lockheed Martin or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Lockheed Martin may increase or decrease. In other words, similar to Lockheed's beta indicator, it measures the risk of Lockheed Martin and helps estimate the fluctuations that may happen in a short period of time. So if prices of Lockheed Martin fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.| Last Reported | Projected for Next Year | ||
| Market Cap | 26.9 B | 14.9 B |
Lockheed Martin's stock volatility refers to the amount of uncertainty or risk involved with the size of changes in its stock's price. It is a statistical measure of the dispersion of returns on Lockheed Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Lockheed Martin's price varies over time.
3 ways to utilize Lockheed Martin's volatility to invest better
Higher Lockheed Martin's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Lockheed Martin stock is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. Lockheed Martin stock volatility can provide helpful information for making investment decisions in the following ways:- Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of Lockheed Martin investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Lockheed Martin's stock can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
- Diversification: Understanding how the volatility of Lockheed Martin's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Lockheed Martin Investment Opportunity
Lockheed Martin has a volatility of 0.92 and is 1.48 times more volatile than NYSE Composite. 8 percent of all equities and portfolios are less risky than Lockheed Martin. You can use Lockheed Martin to enhance the returns of your portfolios. The stock experiences a moderate upward volatility. Check odds of Lockheed Martin to be traded at $498.39 in 90 days.Average diversification
The correlation between Lockheed Martin and NYA is 0.13 (i.e., Average diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and NYA in the same portfolio, assuming nothing else is changed.
Lockheed Martin Additional Risk Indicators
The analysis of Lockheed Martin's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Lockheed Martin's investment and either accepting that risk or mitigating it. Along with some common measures of Lockheed Martin stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
| Risk Adjusted Performance | 0.0086 | |||
| Market Risk Adjusted Performance | (0) | |||
| Mean Deviation | 0.6621 | |||
| Semi Deviation | 1.08 | |||
| Downside Deviation | 1.11 | |||
| Coefficient Of Variation | 12139.3 | |||
| Standard Deviation | 0.9535 |
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
Lockheed Martin Suggested Diversification Pairs
Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Lockheed Martin as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Lockheed Martin's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Lockheed Martin's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Lockheed Martin.
When determining whether Lockheed Martin is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Lockheed Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Lockheed Martin Stock. Highlighted below are key reports to facilitate an investment decision about Lockheed Martin Stock: Check out Correlation Analysis to better understand how to build diversified portfolios, which includes a position in Lockheed Martin. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in population. For more information on how to buy Lockheed Stock please use our How to Invest in Lockheed Martin guide.You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Complementary Tools for Lockheed Stock analysis
When running Lockheed Martin's price analysis, check to measure Lockheed Martin's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Lockheed Martin is operating at the current time. Most of Lockheed Martin's value examination focuses on studying past and present price action to predict the probability of Lockheed Martin's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Lockheed Martin's price. Additionally, you may evaluate how the addition of Lockheed Martin to your portfolios can decrease your overall portfolio volatility.
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Is Lockheed Martin's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Lockheed Martin. If investors know Lockheed will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Lockheed Martin listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.024 | Dividend Share 12.15 | Earnings Share 27.56 | Revenue Per Share 269.96 | Quarterly Revenue Growth (0.01) |
The market value of Lockheed Martin is measured differently than its book value, which is the value of Lockheed that is recorded on the company's balance sheet. Investors also form their own opinion of Lockheed Martin's value that differs from its market value or its book value, called intrinsic value, which is Lockheed Martin's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Lockheed Martin's market value can be influenced by many factors that don't directly affect Lockheed Martin's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Lockheed Martin's value and its price as these two are different measures arrived at by different means. Investors typically determine if Lockheed Martin is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Lockheed Martin's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.