Correlation Between Lockheed Martin and Intuitive Machines

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

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

Diversification Opportunities for Lockheed Martin and Intuitive Machines

-0.29

Correlation Coefficient

Lockheed Martin  Intuitive Machines

Very good diversification

The 3 months correlation between Lockheed and Intuitive is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and Intuitive Machines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Machines 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 Intuitive Machines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Machines has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Intuitive Machines go up and down completely randomly.

Pair Corralation between Lockheed Martin and Intuitive Machines

Considering the 90-day investment horizon Lockheed Martin is expected to generate 0.09 times more return on investment than Intuitive Machines. However, Lockheed Martin is 11.05 times less risky than Intuitive Machines. It trades about -0.06 of its potential returns per unit of risk. Intuitive Machines is currently generating about -0.15 per unit of risk. If you would invest  47,983  in Lockheed Martin on December 30, 2024 and sell it today you would lose (3,834) from holding Lockheed Martin or give up 7.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.19%
Values	Daily Returns

Lockheed Martin  vs.  Intuitive Machines

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. In spite of latest unsteady performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Intuitive Machines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intuitive Machines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Lockheed Martin and Intuitive Machines

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

The idea behind Lockheed Martin and Intuitive Machines 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.