Correlation Between Lockheed Martin and PIMCO RAFI
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and PIMCO RAFI 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 PIMCO RAFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and PIMCO RAFI Dynamic, you can compare the effects of market volatilities on Lockheed Martin and PIMCO RAFI 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 PIMCO RAFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and PIMCO RAFI.
Diversification Opportunities for Lockheed Martin and PIMCO RAFI
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lockheed and PIMCO is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and PIMCO RAFI Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO RAFI Dynamic 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 PIMCO RAFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO RAFI Dynamic has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and PIMCO RAFI go up and down completely randomly.
Pair Corralation between Lockheed Martin and PIMCO RAFI
Considering the 90-day investment horizon Lockheed Martin is expected to generate 1.07 times more return on investment than PIMCO RAFI. However, Lockheed Martin is 1.07 times more volatile than PIMCO RAFI Dynamic. It trades about 0.21 of its potential returns per unit of risk. PIMCO RAFI Dynamic is currently generating about -0.14 per unit of risk. If you would invest 44,041 in Lockheed Martin on January 20, 2024 and sell it today you would earn a total of 1,568 from holding Lockheed Martin or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. PIMCO RAFI Dynamic
Performance |
| Timeline |
| Lockheed Martin |
| PIMCO RAFI Dynamic |
Lockheed Martin and PIMCO RAFI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and PIMCO RAFI
The main advantage of trading using opposite Lockheed Martin and PIMCO RAFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, PIMCO RAFI 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 PIMCO RAFI will offset losses from the drop in PIMCO RAFI's long position.| Lockheed Martin vs. Northrop Grumman | Lockheed Martin vs. General Dynamics | Lockheed Martin vs. L3Harris Technologies | Lockheed Martin vs. The Boeing |
| PIMCO RAFI vs. PIMCO RAFI Dynamic | PIMCO RAFI vs. PIMCO RAFI Dynamic | PIMCO RAFI vs. JPMorgan Diversified Return | PIMCO RAFI vs. JPMorgan Diversified Return |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |