Correlation Between Goldman Sachs and Raytheon Technologies
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and Raytheon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Goldman Sachs and Raytheon Technologies, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of Raytheon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Raytheon Technologies.
Diversification Opportunities for Goldman Sachs and Raytheon Technologies
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goldman and Raytheon is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and Raytheon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytheon Technologies and Goldman Sachs 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 The Goldman Sachs 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 Goldman Sachs i.e., Goldman Sachs and Raytheon Technologies go up and down completely randomly.
Pair Corralation between Goldman Sachs and Raytheon Technologies
Assuming the 90 days trading horizon The Goldman Sachs is expected to generate 1.01 times more return on investment than Raytheon Technologies. However, Goldman Sachs is 1.01 times more volatile than Raytheon Technologies. It trades about 0.09 of its potential returns per unit of risk. Raytheon Technologies is currently generating about 0.05 per unit of risk. If you would invest 6,074 in The Goldman Sachs on August 30, 2024 and sell it today you would earn a total of 5,926 from holding The Goldman Sachs or generate 97.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.97% |
| Values | Daily Returns |
The Goldman Sachs vs. Raytheon Technologies
Performance |
| Timeline |
| Goldman Sachs |
| Raytheon Technologies |
Goldman Sachs and Raytheon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Raytheon Technologies
The main advantage of trading using opposite Goldman Sachs and Raytheon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.| Goldman Sachs vs. Take Two Interactive Software | Goldman Sachs vs. Raytheon Technologies | Goldman Sachs vs. Bemobi Mobile Tech | Goldman Sachs vs. Charter Communications |
| Raytheon Technologies vs. Micron Technology | Raytheon Technologies vs. Spotify Technology SA | Raytheon Technologies vs. Charter Communications | Raytheon Technologies vs. Lupatech SA |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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