Correlation Between Raytheon Technologies and AJ Bell
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and AJ Bell 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 AJ Bell 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 AJ Bell plc, you can compare the effects of market volatilities on Raytheon Technologies and AJ Bell 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 AJ Bell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and AJ Bell.
Diversification Opportunities for Raytheon Technologies and AJ Bell
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Raytheon and AJB is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and AJ Bell plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ Bell plc 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 AJ Bell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ Bell plc has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and AJ Bell go up and down completely randomly.
Pair Corralation between Raytheon Technologies and AJ Bell
Assuming the 90 days trading horizon Raytheon Technologies is expected to generate 1.58 times less return on investment than AJ Bell. But when comparing it to its historical volatility, Raytheon Technologies Corp is 1.37 times less risky than AJ Bell. It trades about 0.04 of its potential returns per unit of risk. AJ Bell plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 33,742 in AJ Bell plc on September 12, 2024 and sell it today you would earn a total of 13,908 from holding AJ Bell plc or generate 41.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Raytheon Technologies Corp vs. AJ Bell plc
Performance |
| Timeline |
| Raytheon Technologies |
| AJ Bell plc |
Raytheon Technologies and AJ Bell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and AJ Bell
The main advantage of trading using opposite Raytheon Technologies and AJ Bell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, AJ Bell 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 AJ Bell will offset losses from the drop in AJ Bell's long position.| Raytheon Technologies vs. Power Metal Resources | Raytheon Technologies vs. Adriatic Metals | Raytheon Technologies vs. Park Hotels Resorts | Raytheon Technologies vs. PPHE Hotel Group |
| AJ Bell vs. BioNTech SE | AJ Bell vs. Raytheon Technologies Corp | AJ Bell vs. Concurrent Technologies Plc | AJ Bell vs. Roper Technologies |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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