Correlation Between Lockheed Martin and GE Aerospace
Can any of the company-specific risk be diversified away by investing in both Lockheed Martin and GE Aerospace 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 GE Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lockheed Martin and GE Aerospace, you can compare the effects of market volatilities on Lockheed Martin and GE Aerospace 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 GE Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lockheed Martin and GE Aerospace.
Diversification Opportunities for Lockheed Martin and GE Aerospace
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lockheed and GE Aerospace is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lockheed Martin and GE Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Aerospace 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 GE Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE Aerospace has no effect on the direction of Lockheed Martin i.e., Lockheed Martin and GE Aerospace go up and down completely randomly.
Pair Corralation between Lockheed Martin and GE Aerospace
Considering the 90-day investment horizon Lockheed Martin is expected to under-perform the GE Aerospace. But the stock apears to be less risky and, when comparing its historical volatility, Lockheed Martin is 1.28 times less risky than GE Aerospace. The stock trades about 0.0 of its potential returns per unit of risk. The GE Aerospace is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 27,571 in GE Aerospace on September 8, 2025 and sell it today you would earn a total of 823.00 from holding GE Aerospace or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lockheed Martin vs. GE Aerospace
Performance |
| Timeline |
| Lockheed Martin |
| GE Aerospace |
Lockheed Martin and GE Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lockheed Martin and GE Aerospace
The main advantage of trading using opposite Lockheed Martin and GE Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lockheed Martin position performs unexpectedly, GE Aerospace 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 GE Aerospace will offset losses from the drop in GE Aerospace's long position.| Lockheed Martin vs. Sabre Insurance Group | Lockheed Martin vs. Bridgford Foods | Lockheed Martin vs. Hanover Foods | Lockheed Martin vs. Hamilton Insurance Group, |
| GE Aerospace vs. Aerofoam Metals | GE Aerospace vs. ACG Metals Limited | GE Aerospace vs. Urban Outfitters | GE Aerospace vs. Perseus Mining Limited |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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