Correlation Between Raytheon Technologies and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and SilverCrest Metals 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 SilverCrest Metals 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 SilverCrest Metals, you can compare the effects of market volatilities on Raytheon Technologies and SilverCrest Metals 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 SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and SilverCrest Metals.
Diversification Opportunities for Raytheon Technologies and SilverCrest Metals
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Raytheon and SilverCrest is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals 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 SilverCrest Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverCrest Metals has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and SilverCrest Metals go up and down completely randomly.
Pair Corralation between Raytheon Technologies and SilverCrest Metals
Assuming the 90 days trading horizon Raytheon Technologies is expected to generate 3.85 times less return on investment than SilverCrest Metals. But when comparing it to its historical volatility, Raytheon Technologies Corp is 3.77 times less risky than SilverCrest Metals. It trades about 0.14 of its potential returns per unit of risk. SilverCrest Metals is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 887.00 in SilverCrest Metals on December 4, 2024 and sell it today you would earn a total of 728.00 from holding SilverCrest Metals or generate 82.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 44.08% |
| Values | Daily Returns |
Raytheon Technologies Corp vs. SilverCrest Metals
Performance |
| Timeline |
| Raytheon Technologies |
| SilverCrest Metals |
Risk-Adjusted Performance
Weak
Weak | Strong |
Raytheon Technologies and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and SilverCrest Metals
The main advantage of trading using opposite Raytheon Technologies and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, SilverCrest Metals 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 SilverCrest Metals will offset losses from the drop in SilverCrest Metals' long position.| Raytheon Technologies vs. iShares Physical Silver | Raytheon Technologies vs. Anglo Asian Mining | Raytheon Technologies vs. Direct Line Insurance | Raytheon Technologies vs. Hochschild Mining plc |
| SilverCrest Metals vs. Batm Advanced Communications | SilverCrest Metals vs. National Beverage Corp | SilverCrest Metals vs. mobilezone holding AG | SilverCrest Metals vs. Tyson Foods Cl |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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