Correlation Between Raytheon Technologies and Ecclesiastical Insurance
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and Ecclesiastical Insurance 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 Ecclesiastical Insurance 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 Ecclesiastical Insurance Office, you can compare the effects of market volatilities on Raytheon Technologies and Ecclesiastical Insurance 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 Ecclesiastical Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Ecclesiastical Insurance.
Diversification Opportunities for Raytheon Technologies and Ecclesiastical Insurance
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Raytheon and Ecclesiastical is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and Ecclesiastical Insurance Offic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecclesiastical Insurance 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 Ecclesiastical Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecclesiastical Insurance has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Ecclesiastical Insurance go up and down completely randomly.
Pair Corralation between Raytheon Technologies and Ecclesiastical Insurance
Assuming the 90 days trading horizon Raytheon Technologies Corp is expected to generate 1.41 times more return on investment than Ecclesiastical Insurance. However, Raytheon Technologies is 1.41 times more volatile than Ecclesiastical Insurance Office. It trades about 0.14 of its potential returns per unit of risk. Ecclesiastical Insurance Office is currently generating about 0.06 per unit of risk. If you would invest 8,002 in Raytheon Technologies Corp on September 2, 2024 and sell it today you would earn a total of 4,075 from holding Raytheon Technologies Corp or generate 50.92% 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. Ecclesiastical Insurance Offic
Performance |
| Timeline |
| Raytheon Technologies |
| Ecclesiastical Insurance |
Raytheon Technologies and Ecclesiastical Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and Ecclesiastical Insurance
The main advantage of trading using opposite Raytheon Technologies and Ecclesiastical Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, Ecclesiastical Insurance 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 Ecclesiastical Insurance will offset losses from the drop in Ecclesiastical Insurance's long position.| Raytheon Technologies vs. International Consolidated Airlines | Raytheon Technologies vs. STMicroelectronics NV | Raytheon Technologies vs. Leroy Seafood Group | Raytheon Technologies vs. Roebuck Food Group |
| Ecclesiastical Insurance vs. Toyota Motor Corp | Ecclesiastical Insurance vs. SoftBank Group Corp | Ecclesiastical Insurance vs. Fannie Mae | Ecclesiastical Insurance vs. Apple Inc |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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