Correlation Between GLOBUS MEDICAL and Lockheed Martin

Can any of the company-specific risk be diversified away by investing in both GLOBUS 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 GLOBUS 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 GLOBUS MEDICAL A and Lockheed Martin, you can compare the effects of market volatilities on GLOBUS 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 GLOBUS MEDICAL with a short position of Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBUS MEDICAL and Lockheed Martin.

Diversification Opportunities for GLOBUS MEDICAL and Lockheed Martin

0.43

Correlation Coefficient

GLOBUS MEDICAL  Lockheed Martin

Very weak diversification

The 3 months correlation between GLOBUS and Lockheed is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding GLOBUS MEDICAL A and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and GLOBUS 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 GLOBUS MEDICAL A 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 GLOBUS MEDICAL i.e., GLOBUS MEDICAL and Lockheed Martin go up and down completely randomly.

Pair Corralation between GLOBUS MEDICAL and Lockheed Martin

Assuming the 90 days trading horizon GLOBUS MEDICAL A is expected to under-perform the Lockheed Martin. But the stock apears to be less risky and, when comparing its historical volatility, GLOBUS MEDICAL A is 1.11 times less risky than Lockheed Martin. The stock trades about -0.11 of its potential returns per unit of risk. The Lockheed Martin is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  46,228  in Lockheed Martin on December 22, 2024 and sell it today you would lose (3,318) from holding Lockheed Martin or give up 7.18% of portfolio value over 90 days.

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

GLOBUS MEDICAL A  vs.  Lockheed Martin

GLOBUS MEDICAL A

Risk-Adjusted Performance

Very Weak

Over the last 90 days GLOBUS MEDICAL A 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Lockheed Martin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lockheed Martin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Lockheed Martin is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GLOBUS MEDICAL and Lockheed Martin

The main advantage of trading using opposite GLOBUS MEDICAL and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLOBUS 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 GLOBUS MEDICAL A 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 Commodity Directory module to find actively traded commodities issued by global exchanges.