Correlation Between Raytheon Technologies and AIM ImmunoTech
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and AIM ImmunoTech 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 Raytheon Technologies and AIM ImmunoTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raytheon Technologies Corp and AIM ImmunoTech, you can compare the effects of market volatilities on Raytheon Technologies and AIM ImmunoTech 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 Raytheon Technologies with a short position of AIM ImmunoTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and AIM ImmunoTech.
Diversification Opportunities for Raytheon Technologies and AIM ImmunoTech
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Raytheon and AIM is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and AIM ImmunoTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM ImmunoTech and Raytheon Technologies 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 Raytheon Technologies Corp are associated (or correlated) with AIM ImmunoTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM ImmunoTech has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and AIM ImmunoTech go up and down completely randomly.
Pair Corralation between Raytheon Technologies and AIM ImmunoTech
Assuming the 90 days trading horizon Raytheon Technologies Corp is expected to generate 0.23 times more return on investment than AIM ImmunoTech. However, Raytheon Technologies Corp is 4.34 times less risky than AIM ImmunoTech. It trades about 0.0 of its potential returns per unit of risk. AIM ImmunoTech is currently generating about -0.06 per unit of risk. If you would invest 12,108 in Raytheon Technologies Corp on September 1, 2024 and sell it today you would lose (31.00) from holding Raytheon Technologies Corp or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raytheon Technologies Corp vs. AIM ImmunoTech
Performance |
| Timeline |
| Raytheon Technologies |
| AIM ImmunoTech |
Raytheon Technologies and AIM ImmunoTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and AIM ImmunoTech
The main advantage of trading using opposite Raytheon Technologies and AIM ImmunoTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, AIM ImmunoTech 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 AIM ImmunoTech will offset losses from the drop in AIM ImmunoTech's long position.| Raytheon Technologies vs. Uniper SE | Raytheon Technologies vs. Mulberry Group PLC | Raytheon Technologies vs. London Security Plc | Raytheon Technologies vs. Triad Group PLC |
| AIM ImmunoTech vs. Enbridge | AIM ImmunoTech vs. Endo International PLC | AIM ImmunoTech vs. Diversified Energy |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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