Correlation Between Raytheon Technologies and GRIT Real
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and GRIT Real 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 GRIT Real 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 GRIT Real Estate, you can compare the effects of market volatilities on Raytheon Technologies and GRIT Real 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 GRIT Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and GRIT Real.
Diversification Opportunities for Raytheon Technologies and GRIT Real
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Raytheon and GRIT is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and GRIT Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIT Real Estate 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 GRIT Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIT Real Estate has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and GRIT Real go up and down completely randomly.
Pair Corralation between Raytheon Technologies and GRIT Real
Assuming the 90 days trading horizon Raytheon Technologies Corp is expected to generate 0.74 times more return on investment than GRIT Real. However, Raytheon Technologies Corp is 1.35 times less risky than GRIT Real. It trades about 0.0 of its potential returns per unit of risk. GRIT Real Estate is currently generating about -0.3 per unit of risk. If you would invest 12,735 in Raytheon Technologies Corp on December 8, 2024 and sell it today you would lose (18.00) from holding Raytheon Technologies Corp or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raytheon Technologies Corp vs. GRIT Real Estate
Performance |
| Timeline |
| Raytheon Technologies |
| GRIT Real Estate |
Raytheon Technologies and GRIT Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and GRIT Real
The main advantage of trading using opposite Raytheon Technologies and GRIT Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, GRIT Real 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 GRIT Real will offset losses from the drop in GRIT Real's long position.| Raytheon Technologies vs. G5 Entertainment AB | ||
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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