Correlation Between BIONTECH and Raytheon Technologies
Can any of the company-specific risk be diversified away by investing in both BIONTECH 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 BIONTECH and Raytheon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIONTECH SE DRN and Raytheon Technologies, you can compare the effects of market volatilities on BIONTECH 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 BIONTECH with a short position of Raytheon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIONTECH and Raytheon Technologies.
Diversification Opportunities for BIONTECH and Raytheon Technologies
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BIONTECH and Raytheon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding BIONTECH SE DRN and Raytheon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytheon Technologies and BIONTECH 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 BIONTECH SE DRN 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 BIONTECH i.e., BIONTECH and Raytheon Technologies go up and down completely randomly.
Pair Corralation between BIONTECH and Raytheon Technologies
Assuming the 90 days trading horizon BIONTECH SE DRN is expected to under-perform the Raytheon Technologies. In addition to that, BIONTECH is 1.67 times more volatile than Raytheon Technologies. It trades about -0.01 of its total potential returns per unit of risk. Raytheon Technologies is currently generating about 0.05 per unit of volatility. If you would invest 8,556 in Raytheon Technologies on September 3, 2024 and sell it today you would earn a total of 3,564 from holding Raytheon Technologies or generate 41.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.59% |
| Values | Daily Returns |
BIONTECH SE DRN vs. Raytheon Technologies
Performance |
| Timeline |
| BIONTECH SE DRN |
| Raytheon Technologies |
BIONTECH and Raytheon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIONTECH and Raytheon Technologies
The main advantage of trading using opposite BIONTECH and Raytheon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIONTECH 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.| BIONTECH vs. Dell Technologies | BIONTECH vs. SVB Financial Group | BIONTECH vs. Micron Technology | BIONTECH vs. Verizon Communications |
| Raytheon Technologies vs. Lockheed Martin | Raytheon Technologies vs. Northrop Grumman | Raytheon Technologies vs. General Dynamics |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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