Correlation Between Lockheed Martin and Distribuidora

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

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

Diversification Opportunities for Lockheed Martin and Distribuidora

-0.17

Correlation Coefficient

Lockheed Martin  Distribuidora

Good diversification

The 3 months correlation between Lockheed and Distribuidora is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin Corp and Distribuidora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distribuidora de Gas 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 Corp are associated (or correlated) with Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Distribuidora de Gas has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and Distribuidora go up and down completely randomly.

Pair Corralation between Lockheed Martin and Distribuidora

Assuming the 90 days trading horizon Lockheed Martin Corp is expected to under-perform the Distribuidora. But the stock apears to be less risky and, when comparing its historical volatility, Lockheed Martin Corp is 1.35 times less risky than Distribuidora. The stock trades about -0.01 of its potential returns per unit of risk. The Distribuidora de Gas is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  130,500  in Distribuidora de Gas on April 24, 2025 and sell it today you would earn a total of  11,000  from holding Distribuidora de Gas or generate 8.43% return on investment over 90 days.

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

Lockheed Martin Corp  vs.  Distribuidora de Gas

Lockheed Martin Corp

Risk-Adjusted Performance

Very Weak

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

Distribuidora de Gas

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Distribuidora de Gas are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Distribuidora may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Lockheed Martin and Distribuidora

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

The idea behind Lockheed Martin Corp and Distribuidora de Gas 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.