Correlation Between AUREA SA and Lockheed Martin

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

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

Diversification Opportunities for AUREA SA and Lockheed Martin

-0.07

Correlation Coefficient

AUREA SA  Lockheed Martin

Good diversification

The 3 months correlation between AUREA and Lockheed is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding AUREA SA INH and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and AUREA SA 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 AUREA SA INH 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 AUREA SA i.e., AUREA SA and Lockheed Martin go up and down completely randomly.

Pair Corralation between AUREA SA and Lockheed Martin

Assuming the 90 days horizon AUREA SA INH is expected to generate 0.84 times more return on investment than Lockheed Martin. However, AUREA SA INH is 1.18 times less risky than Lockheed Martin. It trades about 0.12 of its potential returns per unit of risk. Lockheed Martin is currently generating about -0.1 per unit of risk. If you would invest  502.00  in AUREA SA INH on April 24, 2025 and sell it today you would earn a total of  72.00  from holding AUREA SA INH or generate 14.34% return on investment over 90 days.

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

AUREA SA INH  vs.  Lockheed Martin

AUREA SA INH

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AUREA SA INH are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, AUREA SA reported solid returns over the last few months and may actually be approaching a breakup point.

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 weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AUREA SA and Lockheed Martin

The main advantage of trading using opposite AUREA SA and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUREA SA 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 AUREA SA INH 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.