Correlation Between Raytheon Technologies and Impax Asset
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and Impax Asset 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 Impax Asset 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 Impax Asset Management, you can compare the effects of market volatilities on Raytheon Technologies and Impax Asset 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 Impax Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Impax Asset.
Diversification Opportunities for Raytheon Technologies and Impax Asset
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Raytheon and Impax is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and Impax Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Asset Management 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 Impax Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Asset Management has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Impax Asset go up and down completely randomly.
Pair Corralation between Raytheon Technologies and Impax Asset
Assuming the 90 days trading horizon Raytheon Technologies Corp is expected to generate 0.61 times more return on investment than Impax Asset. However, Raytheon Technologies Corp is 1.65 times less risky than Impax Asset. It trades about -0.1 of its potential returns per unit of risk. Impax Asset Management is currently generating about -0.18 per unit of risk. If you would invest 12,496 in Raytheon Technologies Corp on August 29, 2024 and sell it today you would lose (454.00) from holding Raytheon Technologies Corp or give up 3.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raytheon Technologies Corp vs. Impax Asset Management
Performance |
| Timeline |
| Raytheon Technologies |
| Impax Asset Management |
Raytheon Technologies and Impax Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and Impax Asset
The main advantage of trading using opposite Raytheon Technologies and Impax Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, Impax Asset 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 Impax Asset will offset losses from the drop in Impax Asset's long position.| Raytheon Technologies vs. Samsung Electronics Co | Raytheon Technologies vs. Samsung Electronics Co | Raytheon Technologies vs. Hyundai Motor | Raytheon Technologies vs. Toyota Motor Corp |
| Impax Asset vs. Catalyst Media Group | Impax Asset vs. Oncimmune Holdings plc | Impax Asset vs. Invesco Health Care | Impax Asset vs. Coor Service Management |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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