Correlation Between Superior Plus and Raytheon Technologies
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Raytheon Technologies 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 Superior Plus and Raytheon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Raytheon Technologies Corp, you can compare the effects of market volatilities on Superior Plus and Raytheon Technologies 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 Superior Plus with a short position of Raytheon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Raytheon Technologies.
Diversification Opportunities for Superior Plus and Raytheon Technologies
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and Raytheon is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Raytheon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytheon Technologies and Superior Plus 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 Superior Plus Corp are associated (or correlated) with Raytheon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raytheon Technologies has no effect on the direction of Superior Plus i.e., Superior Plus and Raytheon Technologies go up and down completely randomly.
Pair Corralation between Superior Plus and Raytheon Technologies
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Raytheon Technologies. In addition to that, Superior Plus is 1.48 times more volatile than Raytheon Technologies Corp. It trades about -0.03 of its total potential returns per unit of risk. Raytheon Technologies Corp is currently generating about 0.08 per unit of volatility. If you would invest 7,598 in Raytheon Technologies Corp on September 12, 2024 and sell it today you would earn a total of 3,396 from holding Raytheon Technologies Corp or generate 44.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Raytheon Technologies Corp
Performance |
| Timeline |
| Superior Plus Corp |
| Raytheon Technologies |
Superior Plus and Raytheon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Raytheon Technologies
The main advantage of trading using opposite Superior Plus and Raytheon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Raytheon Technologies 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 Raytheon Technologies will offset losses from the drop in Raytheon Technologies' long position.| Superior Plus vs. AIR PRODCHEMICALS | Superior Plus vs. Suntory Beverage Food | Superior Plus vs. Molson Coors Beverage | Superior Plus vs. Monster Beverage Corp |
| Raytheon Technologies vs. JAPAN AIRLINES | Raytheon Technologies vs. Elmos Semiconductor SE | Raytheon Technologies vs. Singapore Airlines Limited | Raytheon Technologies vs. Marie Brizard Wine |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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