Correlation Between Intermediate Capital and Raytheon Technologies
Can any of the company-specific risk be diversified away by investing in both Intermediate Capital 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 Intermediate Capital and Raytheon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Capital Group and Raytheon Technologies Corp, you can compare the effects of market volatilities on Intermediate Capital 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 Intermediate Capital with a short position of Raytheon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Capital and Raytheon Technologies.
Diversification Opportunities for Intermediate Capital and Raytheon Technologies
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intermediate and Raytheon is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and Raytheon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytheon Technologies and Intermediate Capital 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 Intermediate Capital Group 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 Intermediate Capital i.e., Intermediate Capital and Raytheon Technologies go up and down completely randomly.
Pair Corralation between Intermediate Capital and Raytheon Technologies
Assuming the 90 days trading horizon Intermediate Capital Group is expected to generate 1.82 times more return on investment than Raytheon Technologies. However, Intermediate Capital is 1.82 times more volatile than Raytheon Technologies Corp. It trades about 0.01 of its potential returns per unit of risk. Raytheon Technologies Corp is currently generating about -0.19 per unit of risk. If you would invest 221,322 in Intermediate Capital Group on September 13, 2024 and sell it today you would lose (522.00) from holding Intermediate Capital Group or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Capital Group vs. Raytheon Technologies Corp
Performance |
| Timeline |
| Intermediate Capital |
| Raytheon Technologies |
Intermediate Capital and Raytheon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Capital and Raytheon Technologies
The main advantage of trading using opposite Intermediate Capital and Raytheon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Capital 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.| Intermediate Capital vs. Raytheon Technologies Corp | Intermediate Capital vs. European Metals Holdings | Intermediate Capital vs. Celebrus Technologies plc | Intermediate Capital vs. Southern Copper Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |