Correlation Between Raytheon Technologies and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and CATLIN GROUP 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 CATLIN GROUP 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 CATLIN GROUP , you can compare the effects of market volatilities on Raytheon Technologies and CATLIN GROUP 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 CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and CATLIN GROUP.
Diversification Opportunities for Raytheon Technologies and CATLIN GROUP
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Raytheon and CATLIN is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP 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 CATLIN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATLIN GROUP has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Raytheon Technologies and CATLIN GROUP
Assuming the 90 days trading horizon Raytheon Technologies Corp is expected to generate 1.4 times more return on investment than CATLIN GROUP. However, Raytheon Technologies is 1.4 times more volatile than CATLIN GROUP . It trades about 0.38 of its potential returns per unit of risk. CATLIN GROUP is currently generating about -0.26 per unit of risk. If you would invest 11,629 in Raytheon Technologies Corp on November 2, 2024 and sell it today you would earn a total of 1,063 from holding Raytheon Technologies Corp or generate 9.14% 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. CATLIN GROUP
Performance |
| Timeline |
| Raytheon Technologies |
| CATLIN GROUP |
Raytheon Technologies and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and CATLIN GROUP
The main advantage of trading using opposite Raytheon Technologies and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, CATLIN GROUP 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 CATLIN GROUP will offset losses from the drop in CATLIN GROUP's long position.| Raytheon Technologies vs. Capital Metals PLC | Raytheon Technologies vs. Power Metal Resources | Raytheon Technologies vs. Premier Foods PLC | Raytheon Technologies vs. Cornish Metals |
| CATLIN GROUP vs. Evolution Gaming Group | CATLIN GROUP vs. Bisichi Mining PLC | CATLIN GROUP vs. Empire Metals Limited | CATLIN GROUP vs. GreenX Metals |
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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