BA vs LMT: Stock Returns, Risk & Volatility (2026)

Q: Which is a better investment: BA or LMT?

Over the past year, LMT looks like the better investment: it had higher total return (LMT +34.6% vs BA +30.7%) and a higher Sharpe ratio (LMT 1.15 vs BA 1.05). On risk, LMT was less volatile (LMT 26.2% vs BA 30.8%), LMT had a smaller max drawdown (LMT -15.6% vs BA -25.0%), and LMT had less severe losses on the worst 5% of days (Expected Shortfall of LMT -3.98% vs BA -3.99%).

Written by Gale Finance Team

Reviewed by Sid Kalla CFA Charterholder

Quick answer

Which is a better investment: BA or LMT?

Over the past year, LMT outperformed (+30.7% vs +34.6%) with a Sharpe ratio of 1.15.

Total Return

BA +30.7%

LMT WIN +34.6%

Sharpe Ratio

BA 1.05

LMT WIN 1.15

Annualized Volatility

BA 30.8%

LMT WIN 26.2%

Max Drawdown

BA -25.0%

LMT WIN -15.6%

Analysis period: 2025-04-14 to 2026-04-10

BA Total Return

↑ +30.7%

LMT Total Return

↑ +34.6%

Relative Performance of BA vs LMT (Normalized to 100)

BA LMT

Normalized to 100 at start date for comparison

Key Takeaways

Total Return: BA delivered a +30.7% total return, while LMT returned +34.6% over the same period. LMT outperformed on total returns.
Risk-Adjusted Return (Sharpe Ratio): LMT had a higher Sharpe (1.15 vs 1.05), indicating better risk-adjusted performance.
Volatility (Annualized): BA was more volatile, with 30.8% annualized volatility, versus 26.2% for LMT.
Maximum Drawdown: LMT's maximum drawdown was -15.6%, while BA experienced a deeper drawdown of -25.0%.
Tail Risk (VaR & Expected Shortfall): At the 5% level (daily log returns), BA's VaR was -3.06% and its Expected Shortfall (CVaR) was -3.99%; LMT's were -2.47% and -3.98%. VaR is the cutoff; Expected Shortfall is the average move on the worst days.
Skew & Kurtosis: Skew: BA 0.41 vs LMT -1.44. Excess kurtosis: BA 2.78 vs LMT 9.19. Negative skew leans downside; higher excess kurtosis means fatter tails.
Tail Days & Extremes: 2σ tail days (down/up): BA 6/7, LMT 7/5. Worst day: BA -6.32% (2025-10-30) vs LMT -10.81% (2025-07-22). Best day: BA +10.15% (2025-12-02) vs LMT +4.72% (2026-01-09).
Risk ratios: Sortino - BA: 1.64 vs. LMT: 1.58 , Calmar - BA: 1.49 vs. LMT: 2.31 , Sterling - BA: 1.33 vs. LMT: 2.33 , Treynor - BA: 0.34 vs. LMT: 1.92 , Ulcer Index - BA: 10.05% vs. LMT: 6.16%

Boeing vs Lockheed Martin Correlation

0.12 Average Correlation

Boeing and Lockheed Martin are weakly correlated over the past year. With a correlation of 0.12, these assets show meaningful independence, offering diversification benefits when held together.

For portfolio construction, this weak correlation suggests that combining BA and LMT could reduce overall portfolio variance. However, correlations can increase during market stress.

Metric	Value
Current (30-day)	0.46
Average (full period)	0.12
Minimum	-0.21
Maximum	0.46

Correlation measures how closely two assets move together. Values near +1 indicate strong co-movement, near 0 indicates independence, and negative values indicate inverse movement.

Investment Comparison

If you invested $10,000 in each asset on April 14, 2025:

BA $13,072.58 +30.7%

LMT $13,461.16 +34.6%

Difference: $388.58 (LMT ahead)

Boeing and Lockheed Martin: Risk Analysis

Boeing experienced its maximum drawdown of -25% from 2026-01-23 to 2026-03-30. It has not yet recovered to its previous peak.

Lockheed Martin experienced its maximum drawdown of -15.6% from 2025-06-13 to 2025-07-22. It took 63 days to recover.

Smaller drawdowns and faster recoveries indicate lower downside risk and greater resilience during market stress.

Sharpe Ratio of BA and LMT

BA Sharpe Ratio

↑ 1.05

LMT Sharpe Ratio

↑ 1.15

Sharpe ratio measures return per unit of risk (volatility). A higher Sharpe indicates better risk-adjusted performance. LMT had a higher Sharpe (1.15 vs 1.05), indicating better risk-adjusted performance.

A Sharpe above 1.0 is generally considered good, above 2.0 is excellent. Negative Sharpe means the asset underperformed the risk-free rate. Calculated on each asset's full 365-day lookback of available prices and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).

Sortino Ratio of BA and LMT

BA Sortino Ratio

↑ 1.64

LMT Sortino Ratio

↑ 1.58

Sortino ratio measures return per unit of downside risk. Unlike Sharpe, it only counts downside deviation (returns below the target return). BA had better downside-adjusted returns.

A higher Sortino is better. It's useful when upside volatility is common (crypto is the obvious example). Downside deviation: BA 19.6% vs LMT 19.0%. Calculated on each asset's full 365-day lookback of available prices, using the daily risk-free rate as the target return, and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).

Calmar Ratio of BA and LMT

BA Calmar Ratio

↑ 1.49

LMT Calmar Ratio

↑ 2.31

Calmar ratio compares CAGR to maximum drawdown. Higher Calmar means more return per unit of worst drawdown. LMT posted the higher Calmar ratio.

Calmar is computed on each asset's full 365-day lookback and uses the max drawdown over that same window.

Sterling Ratio of BA and LMT

BA Sterling Ratio

↑ 1.33

LMT Sterling Ratio

↑ 2.33

Sterling ratio measures excess return per unit of average drawdown (typically drawdowns worse than 10%). LMT posted the higher Sterling ratio.

Sterling uses average drawdown events deeper than 10% and subtracts the risk-free rate to report excess return.

Treynor Ratio of BA and LMT

BA Treynor Ratio

↑ 0.34

LMT Treynor Ratio

↑ 1.92

Treynor ratio measures excess return per unit of market risk (beta) instead of total volatility. LMT posted the higher Treynor ratio.

Treynor uses beta vs the S&P 500 (SPY) on shared dates and the average 3-month Treasury rate as the risk-free rate.

Ulcer Index of BA and LMT

BA Ulcer Index

10.05%

LMT Ulcer Index

6.16%

Ulcer Index captures drawdown depth and duration. Lower Ulcer Index means less drawdown pain. LMT had the lower Ulcer Index (less drawdown pain).

Ulcer Index is computed from each asset's drawdown series over the full lookback window.

Tail Risk & Distribution Shape (1-Year): Boeing vs. Lockheed Martin

This section looks at the shape of daily returns, not just the average. Tail stats are computed per asset on its own daily series (crypto includes weekends). We use daily log returns $\ln\left(\frac{P_t}{P_{t-1}}\right)$ so multi-day moves add cleanly.

Definitions: Value at Risk (VaR), Expected Shortfall, skew, kurtosis, and fat tails.

Metric (1-Year)	BA	LMT
5% VaR (daily log return)	-3.06%	-2.47%
5% Expected Shortfall (CVaR)	-3.99% (worst 13 days)	-3.98% (worst 13 days)
Skew	0.41	-1.44
Excess kurtosis	2.78	9.19
2σ tail days (down / up)	6 / 7	7 / 5
Worst day	-6.32% (2025-10-30)	-10.81% (2025-07-22)
Best day	+10.15% (2025-12-02)	+4.72% (2026-01-09)

Downside co-moves (2σ) — 1-Year

Computed on shared dates only (n=243). A “2σ downside move” means a shared-close log return more than 2 standard deviations below that asset’s own mean on this shared-date series. Dates below show simple returns (%) for readability.

When LMT has a big down day, BA also does

0.0%

0 / 7 days

When BA has a big down day, LMT also does

0.0%

0 / 6 days

Show downside tail dates

Dates below are shared-date observations. The “Date” is the period end (close). Tail thresholds are computed on log returns, but the table shows simple returns (%) for readability. Returns are computed from the previous shared close to this one (for example, Friday → Monday includes weekend moves).

Days when both BA and LMT had a big down day (2σ)

None in this window.

Days when BA had a big down day

Date (interval)	BA	LMT
2025-06-12	-4.79%	+2.77%
2025-07-29	-4.37%	-0.29%
2025-10-09	-4.14%	-1.22%
2025-10-29	-4.37%	-0.09%
2025-10-30	-6.32%	+0.90%
2026-03-12	-4.36%	+0.52%

Days when LMT had a big down day

Date (interval)	BA	LMT
2025-06-11	-0.80%	-4.26%
2025-06-13 → 2025-06-16	+0.69%	-3.99%
2025-07-22	-0.37%	-10.81%
2025-10-21	+0.20%	-3.24%
2025-11-28 → 2025-12-01	-1.34%	-3.32%
2026-01-07	-0.75%	-4.82%
2026-02-04	+1.20%	-4.06%

Read this as “how ugly the ugly days get”, not as a precise forecast. One-year samples are small, so tail estimates are inherently noisy.

Boeing vs Lockheed Martin Volatility (BA vs LMT)

BA Volatility

30.8%

±1.94% daily

LMT Volatility

26.2%

±1.65% daily

Typical daily swing

±1.94%

LMT

±1.65%

Boeing's annualized volatility of 30.8% means it typically moves ±1.94% on any given day.

Lockheed Martin's annualized volatility of 26.2% means it typically moves ±1.65% on any given day.

BA's higher volatility means a wider path to returns — this can be attractive for tactical, shorter-term exposure, while LMT's smoother profile may better suit long-term allocators seeking steadier growth.

For comparison, the S&P 500 typically has 15-18% annualized volatility, translating to roughly ±1% daily moves. Higher volatility means larger potential gains but also larger potential losses.

Boeing vs Lockheed Martin Performance Over Time

Metric	BA	LMT
30 Days	-7.1%	-6.7%
90 Days	-8.6%	25.9%
180 Days	-3.7%	25.1%
1 Year	N/A	N/A

Shorter time frames can show different leaders as market conditions change. Consider your investment horizon when comparing performance.

Full Comparison of Boeing vs. Lockheed Martin (1-Year)

Metric	BA	LMT
Total Return	+30.7%	+34.6%
Annualized Volatility	30.8%	26.2%
Sharpe Ratio	1.05	1.15
Sortino Ratio	1.64	1.58
Calmar Ratio	1.49	2.31
Sterling Ratio	1.33	2.33
Treynor Ratio	0.34	1.92
Ulcer Index	10.05%	6.16%
Max Drawdown	-25.0%	-15.6%
Avg Correlation to S&P 500	0.34	0.07
5% VaR (daily log return)	-3.06%	-2.47%
5% Expected Shortfall (CVaR)	-3.99%	-3.98%
Skew	0.41	-1.44
Excess kurtosis	2.78	9.19
2σ tail days (down / up)	6 / 7	7 / 5

Audit this calculation

Formulas, inputs, and conventions used to compute the metrics on this page.

Inputs & conventions

Shared window for pair metrics: 2025-04-14 → 2026-04-02 (last shared close).
Rolling correlation sample (shared closes): 214 rolling 30-day values (from 243 shared daily returns).
Annualization (days/year): BA: 252 days/year; LMT: 252 days/year.
Risk-free rate: Uses the 3-month U.S. Treasury yield (FRED: DGS3MO), averaged over each asset’s window:

BA: 4.17% over 2025-04-14 → 2026-04-10.

LMT: 4.17% over 2025-04-14 → 2026-04-02.
Volatility drag (rule of thumb): Estimated from annualized volatility (simple returns). For the log-return framing, see Log returns.

BA: ≈ -4.7%/yr

LMT: ≈ -3.4%/yr
Data alignment: No forward fill. Correlation and tail co-moves are computed on shared closes only.
For cross-calendar pairs (e.g., crypto vs stocks), weekend/holiday moves roll into the next shared close.
Return conventions: Volatility/Sharpe/Sortino use simple daily returns. Tail-risk uses daily log returns for distribution stats (but tables show simple returns). Log returns.

Formulas

Daily simple return

r_t = \frac{P_t}{P_{t-1}} - 1

Volatility

\sigma_{ann} = \sigma(r_t)\sqrt{A}

Volatility drag (approx.)

\text{drag} \approx \tfrac{1}{2}\sigma_{ann}^2

Sharpe Ratio

S = \frac{A\,\bar{r} - r_f}{\sigma(r_t)\sqrt{A}}

Sortino Ratio

So = \frac{A\,\bar{r} - r_f}{\sqrt{\mathbb{E}[\min(0,\,r_t - r_f/A)^2]}\,\sqrt{A}}

Maximum Drawdown

MDD = \min_t\left(\frac{P_t}{\max_{s \le t} P_s} - 1\right)

Average Correlation

\rho = \frac{\operatorname{cov}(r^A,\,r^B)}{\sigma_A\,\sigma_B}

Log returns

\ell_t = \ln\left(\frac{P_t}{P_{t-1}}\right)

Notation

$P_t$: Price on day t.
$r_t$: Simple daily return.
$\ell_t$: Log daily return.
$\bar{r}$: Average daily return.
$\sigma(r_t)$: Standard deviation of daily returns.
$A$: Annualization factor (days/year).
$r_f$: Annual risk-free rate.

Boeing vs Lockheed Martin: Frequently Asked Questions

Which has higher volatility: BA or LMT?

BA showed higher volatility at 30.8% annualized, compared to 26.2% for LMT Over the past year. Higher volatility means larger price swings in both directions.

Does BA provide diversification when held with LMT?

BA and LMT are weakly correlated over the past year, with an average correlation of 0.12. This weak correlation suggests meaningful diversification benefits when held together.

How bad are the worst 5% days for BA vs LMT?

Over the past year, BA's 5% VaR was -3.06% and its 5% Expected Shortfall was -3.99% (worst 13 days). LMT's were -2.47% and -3.98% (worst 13 days).

Do BA and LMT crash together on bad days?

On shared dates (n=243), when LMT has a 2σ down day, BA also does 0.0% (0/7 days). In the other direction, when BA has one, LMT also does 0.0% (0/6 days).

Which has better risk-adjusted returns: BA or LMT?

LMT showed better risk-adjusted performance with a Sharpe ratio of 1.15 versus BA's 1.05 Over the past year.

Can BA and LMT be combined in a portfolio?

Yes, though allocation sizing matters. Their weak correlation could meaningfully reduce overall portfolio variance. BA's higher volatility (30.8%) means even small allocations can materially impact overall portfolio risk.

Explore our financial glossary