Correlation Between CVR Medical and Lockheed Martin

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

By analyzing existing cross correlation between CVR Medical Corp and Lockheed Martin, you can compare the effects of market volatilities on CVR Medical 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 CVR Medical with a short position of Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Medical and Lockheed Martin.

Diversification Opportunities for CVR Medical and Lockheed Martin

0.0

Correlation Coefficient

CVR Medical  Lockheed Martin

Pay attention - limited upside

The 3 months correlation between CVR and Lockheed is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CVR Medical Corp and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and CVR Medical 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 CVR Medical Corp 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 CVR Medical i.e., CVR Medical and Lockheed Martin go up and down completely randomly.

Pair Corralation between CVR Medical and Lockheed Martin

If you would invest  1.35  in CVR Medical Corp on October 5, 2024 and sell it today you would earn a total of  0.00  from holding CVR Medical Corp or generate 0.0% return on investment over 90 days.

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

CVR Medical Corp  vs.  Lockheed Martin

CVR Medical Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 fragile performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CVR Medical and Lockheed Martin

The main advantage of trading using opposite CVR Medical and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Medical 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.

The idea behind CVR Medical Corp and Lockheed Martin 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.