Correlation Between Lockheed Martin and Groupe Gorg

Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and Groupe Gorg 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 Groupe Gorg into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lockheed Martin and Groupe Gorg SA, you can compare the effects of market volatilities on Lockheed Martin and Groupe Gorg 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 Groupe Gorg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and Groupe Gorg.

Diversification Opportunities for Lockheed Martin and Groupe Gorg

-0.06

Correlation Coefficient

Lockheed Martin  Groupe Gorg

Good diversification

The 3 months correlation between Lockheed and Groupe is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Groupe Gorg SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Gorg SA 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 Groupe Gorg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Gorg SA has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Groupe Gorg go up and down completely randomly.

Pair Corralation between Lockheed Martin and Groupe Gorg

Assuming the 90 days horizon Lockheed Martin is expected to generate 0.15 times more return on investment than Groupe Gorg. However, Lockheed Martin is 6.58 times less risky than Groupe Gorg. It trades about 0.15 of its potential returns per unit of risk. Groupe Gorg SA is currently generating about -0.09 per unit of risk. If you would invest  42,060  in Lockheed Martin on January 28, 2024 and sell it today you would earn a total of  1,090  from holding Lockheed Martin or generate 2.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lockheed Martin  vs.  Groupe Gorg SA

Lockheed Martin

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lockheed Martin are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Lockheed Martin may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Groupe Gorg SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Groupe Gorg SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Lockheed Martin and Groupe Gorg

The main advantage of trading using opposite Lockheed Martin and Groupe Gorg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, Groupe Gorg 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 Groupe Gorg will offset losses from the drop in Groupe Gorg's long position.

The idea behind Lockheed Martin and Groupe Gorg SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.