Correlation Between Moneysupermarket and Lockheed Martin

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

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

Diversification Opportunities for Moneysupermarket and Lockheed Martin

0.09

Correlation Coefficient

Moneysupermarket  Lockheed Martin

Significant diversification

The 3 months correlation between Moneysupermarket and Lockheed is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Moneysupermarket Group PLC and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and Moneysupermarket 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 Moneysupermarket Group PLC 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 Moneysupermarket i.e., Moneysupermarket and Lockheed Martin go up and down completely randomly.

Pair Corralation between Moneysupermarket and Lockheed Martin

Assuming the 90 days horizon Moneysupermarket Group PLC is expected to generate 0.48 times more return on investment than Lockheed Martin. However, Moneysupermarket Group PLC is 2.09 times less risky than Lockheed Martin. It trades about -0.05 of its potential returns per unit of risk. Lockheed Martin is currently generating about -0.14 per unit of risk. If you would invest  242.00  in Moneysupermarket Group PLC on April 5, 2025 and sell it today you would lose (3.00) from holding Moneysupermarket Group PLC or give up 1.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Moneysupermarket Group PLC  vs.  Lockheed Martin

Moneysupermarket

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Moneysupermarket Group PLC are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Moneysupermarket reported solid returns over the last few months and may actually be approaching a breakup point.

Lockheed Martin

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lockheed Martin are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Lockheed Martin is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Moneysupermarket and Lockheed Martin

The main advantage of trading using opposite Moneysupermarket and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moneysupermarket 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 Moneysupermarket Group PLC 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.