Correlation Between Raytheon Technologies and Citigroup
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and Citigroup 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 Citigroup 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 Citigroup, you can compare the effects of market volatilities on Raytheon Technologies and Citigroup 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 Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Citigroup.
Diversification Opportunities for Raytheon Technologies and Citigroup
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Raytheon and Citigroup is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup 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 Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Citigroup go up and down completely randomly.
Pair Corralation between Raytheon Technologies and Citigroup
Assuming the 90 days trading horizon Raytheon Technologies Corp is expected to under-perform the Citigroup. In addition to that, Raytheon Technologies is 1.42 times more volatile than Citigroup. It trades about -0.19 of its total potential returns per unit of risk. Citigroup is currently generating about 0.23 per unit of volatility. If you would invest 6,906 in Citigroup on September 14, 2024 and sell it today you would earn a total of 290.00 from holding Citigroup or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raytheon Technologies Corp vs. Citigroup
Performance |
| Timeline |
| Raytheon Technologies |
| Citigroup |
Raytheon Technologies and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and Citigroup
The main advantage of trading using opposite Raytheon Technologies and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| Raytheon Technologies vs. Samsung Electronics Co | Raytheon Technologies vs. Samsung Electronics Co | Raytheon Technologies vs. Hyundai Motor | Raytheon Technologies vs. Reliance Industries Ltd |
| Citigroup vs. BE Semiconductor Industries | Citigroup vs. Accsys Technologies PLC | Citigroup vs. Eastinco Mining Exploration | Citigroup vs. Raytheon Technologies Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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