Correlation Between Raytheon Technologies and SOGECLAIR
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and SOGECLAIR 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 SOGECLAIR 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 SOGECLAIR SA INH, you can compare the effects of market volatilities on Raytheon Technologies and SOGECLAIR 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 SOGECLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and SOGECLAIR.
Diversification Opportunities for Raytheon Technologies and SOGECLAIR
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Raytheon and SOGECLAIR is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and SOGECLAIR SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOGECLAIR SA INH 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 SOGECLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOGECLAIR SA INH has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and SOGECLAIR go up and down completely randomly.
Pair Corralation between Raytheon Technologies and SOGECLAIR
Assuming the 90 days horizon Raytheon Technologies is expected to generate 1.71 times less return on investment than SOGECLAIR. But when comparing it to its historical volatility, Raytheon Technologies Corp is 5.18 times less risky than SOGECLAIR. It trades about 0.36 of its potential returns per unit of risk. SOGECLAIR SA INH is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,740 in SOGECLAIR SA INH on October 23, 2024 and sell it today you would earn a total of 145.00 from holding SOGECLAIR SA INH or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raytheon Technologies Corp vs. SOGECLAIR SA INH
Performance |
| Timeline |
| Raytheon Technologies |
| SOGECLAIR SA INH |
Raytheon Technologies and SOGECLAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and SOGECLAIR
The main advantage of trading using opposite Raytheon Technologies and SOGECLAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, SOGECLAIR 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 SOGECLAIR will offset losses from the drop in SOGECLAIR's long position.| Raytheon Technologies vs. Laureate Education | Raytheon Technologies vs. Salesforce | Raytheon Technologies vs. Adtalem Global Education | Raytheon Technologies vs. Gruppo Mutuionline SpA |
| SOGECLAIR vs. Raytheon Technologies Corp | SOGECLAIR vs. The Boeing | SOGECLAIR vs. Lockheed Martin | SOGECLAIR vs. The Boeing |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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