Correlation Between JLEN Environmental and Raytheon Technologies
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental 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 JLEN Environmental and Raytheon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JLEN Environmental Assets and Raytheon Technologies Corp, you can compare the effects of market volatilities on JLEN Environmental 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 JLEN Environmental with a short position of Raytheon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Raytheon Technologies.
Diversification Opportunities for JLEN Environmental and Raytheon Technologies
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between JLEN and Raytheon is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Raytheon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytheon Technologies and JLEN Environmental 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 JLEN Environmental Assets 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 JLEN Environmental i.e., JLEN Environmental and Raytheon Technologies go up and down completely randomly.
Pair Corralation between JLEN Environmental and Raytheon Technologies
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Raytheon Technologies. In addition to that, JLEN Environmental is 1.11 times more volatile than Raytheon Technologies Corp. It trades about -0.24 of its total potential returns per unit of risk. Raytheon Technologies Corp is currently generating about -0.03 per unit of volatility. If you would invest 12,412 in Raytheon Technologies Corp on September 2, 2024 and sell it today you would lose (335.00) from holding Raytheon Technologies Corp or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.48% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Raytheon Technologies Corp
Performance |
| Timeline |
| JLEN Environmental Assets |
| Raytheon Technologies |
JLEN Environmental and Raytheon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Raytheon Technologies
The main advantage of trading using opposite JLEN Environmental and Raytheon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental 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.| JLEN Environmental vs. Samsung Electronics Co | JLEN Environmental vs. Samsung Electronics Co | JLEN Environmental vs. Toyota Motor Corp | JLEN Environmental vs. Reliance Industries Ltd |
| Raytheon Technologies vs. International Consolidated Airlines | Raytheon Technologies vs. STMicroelectronics NV | Raytheon Technologies vs. Leroy Seafood Group | Raytheon Technologies vs. Roebuck Food Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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