Correlation Between Raytheon Technologies and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Raytheon Technologies and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Samsung Electronics.
Diversification Opportunities for Raytheon Technologies and Samsung Electronics
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Raytheon and Samsung is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Samsung Electronics go up and down completely randomly.
Pair Corralation between Raytheon Technologies and Samsung Electronics
Assuming the 90 days trading horizon Raytheon Technologies Corp is expected to generate 0.88 times more return on investment than Samsung Electronics. However, Raytheon Technologies Corp is 1.14 times less risky than Samsung Electronics. It trades about 0.04 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.01 per unit of risk. If you would invest 9,523 in Raytheon Technologies Corp on August 29, 2024 and sell it today you would earn a total of 2,573 from holding Raytheon Technologies Corp or generate 27.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Raytheon Technologies Corp vs. Samsung Electronics Co
Performance |
| Timeline |
| Raytheon Technologies |
| Samsung Electronics |
Raytheon Technologies and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and Samsung Electronics
The main advantage of trading using opposite Raytheon Technologies and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Raytheon Technologies vs. Lendinvest PLC | Raytheon Technologies vs. Neometals | Raytheon Technologies vs. Coor Service Management | Raytheon Technologies vs. Albion Technology General |
| Samsung Electronics vs. Ondine Biomedical | Samsung Electronics vs. Europa Metals | Samsung Electronics vs. Lendinvest PLC | Samsung Electronics vs. Neometals |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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