Correlation Between Raytheon Technologies and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and Batm Advanced 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 Batm Advanced 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 Batm Advanced Communications, you can compare the effects of market volatilities on Raytheon Technologies and Batm Advanced 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 Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Batm Advanced.
Diversification Opportunities for Raytheon Technologies and Batm Advanced
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Raytheon and Batm is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun 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 Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Batm Advanced go up and down completely randomly.
Pair Corralation between Raytheon Technologies and Batm Advanced
Assuming the 90 days trading horizon Raytheon Technologies Corp is expected to generate 0.52 times more return on investment than Batm Advanced. However, Raytheon Technologies Corp is 1.93 times less risky than Batm Advanced. It trades about 0.55 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.03 per unit of risk. If you would invest 11,420 in Raytheon Technologies Corp on November 7, 2024 and sell it today you would earn a total of 1,460 from holding Raytheon Technologies Corp or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raytheon Technologies Corp vs. Batm Advanced Communications
Performance |
| Timeline |
| Raytheon Technologies |
| Batm Advanced Commun |
Raytheon Technologies and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and Batm Advanced
The main advantage of trading using opposite Raytheon Technologies and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, Batm Advanced 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 Batm Advanced will offset losses from the drop in Batm Advanced's long position.| Raytheon Technologies vs. Bisichi Mining PLC | Raytheon Technologies vs. GoldMining | Raytheon Technologies vs. Coeur Mining | Raytheon Technologies vs. Eastinco Mining Exploration |
| Batm Advanced vs. Metals Exploration Plc | Batm Advanced vs. URU Metals | Batm Advanced vs. UNIQA Insurance Group | Batm Advanced vs. Ross Stores |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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