Correlation Between Lockheed Martin and Eventbrite

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

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

Diversification Opportunities for Lockheed Martin and Eventbrite

-0.79

Correlation Coefficient

Lockheed Martin  Eventbrite

Pay attention - limited upside

The 3 months correlation between Lockheed and Eventbrite is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Eventbrite Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventbrite Class A 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 Eventbrite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventbrite Class A has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Eventbrite go up and down completely randomly.

Pair Corralation between Lockheed Martin and Eventbrite

Considering the 90-day investment horizon Lockheed Martin is expected to generate 0.29 times more return on investment than Eventbrite. However, Lockheed Martin is 3.4 times less risky than Eventbrite. It trades about 0.12 of its potential returns per unit of risk. Eventbrite Class A is currently generating about -0.05 per unit of risk. If you would invest  45,288  in Lockheed Martin on August 23, 2024 and sell it today you would earn a total of  8,185  from holding Lockheed Martin or generate 18.07% return on investment over 90 days.

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

Lockheed Martin  vs.  Eventbrite Class A

Lockheed Martin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lockheed Martin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Lockheed Martin is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Eventbrite Class A

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eventbrite Class A are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Eventbrite is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lockheed Martin and Eventbrite

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

The idea behind Lockheed Martin and Eventbrite Class A 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 CEOs Directory module to screen CEOs from public companies around the world.