Correlation Between Twitter and Lockheed Martin
Can any of the company-specific risk be diversified away by investing in both Twitter 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 Twitter and Lockheed Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twitter and Lockheed Martin, you can compare the effects of market volatilities on Twitter 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 Twitter with a short position of Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twitter and Lockheed Martin.
Diversification Opportunities for Twitter and Lockheed Martin
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Twitter and Lockheed is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and Twitter 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 Twitter 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 Twitter i.e., Twitter and Lockheed Martin go up and down completely randomly.
Pair Corralation between Twitter and Lockheed Martin
If you would invest 44,041 in Lockheed Martin on January 20, 2024 and sell it today you would earn a total of 2,346 from holding Lockheed Martin or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Twitter vs. Lockheed Martin
Performance |
| Timeline |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lockheed Martin |
Twitter and Lockheed Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Twitter and Lockheed Martin
The main advantage of trading using opposite Twitter and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter 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.| Twitter vs. Artisan Partners Asset | Twitter vs. Constellation Brands Class | Twitter vs. Waste Management | Twitter vs. Fresh Grapes LLC |
| Lockheed Martin vs. Novocure | Lockheed Martin vs. HubSpot | Lockheed Martin vs. DigitalOcean Holdings | Lockheed Martin vs. Appian Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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