Correlation Between Playtech Plc and Raytheon Technologies
Can any of the company-specific risk be diversified away by investing in both Playtech Plc 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 Playtech Plc and Raytheon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtech Plc and Raytheon Technologies Corp, you can compare the effects of market volatilities on Playtech Plc 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 Playtech Plc with a short position of Raytheon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtech Plc and Raytheon Technologies.
Diversification Opportunities for Playtech Plc and Raytheon Technologies
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Playtech and Raytheon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Playtech Plc and Raytheon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytheon Technologies and Playtech Plc 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 Playtech Plc 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 Playtech Plc i.e., Playtech Plc and Raytheon Technologies go up and down completely randomly.
Pair Corralation between Playtech Plc and Raytheon Technologies
Assuming the 90 days trading horizon Playtech Plc is expected to under-perform the Raytheon Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Playtech Plc is 1.77 times less risky than Raytheon Technologies. The stock trades about -0.09 of its potential returns per unit of risk. The Raytheon Technologies Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11,929 in Raytheon Technologies Corp on August 25, 2024 and sell it today you would earn a total of 155.00 from holding Raytheon Technologies Corp or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtech Plc vs. Raytheon Technologies Corp
Performance |
| Timeline |
| Playtech Plc |
| Raytheon Technologies |
Playtech Plc and Raytheon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtech Plc and Raytheon Technologies
The main advantage of trading using opposite Playtech Plc and Raytheon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtech Plc 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.| Playtech Plc vs. Aurora Investment Trust | Playtech Plc vs. Air Products Chemicals | Playtech Plc vs. Porvair plc | Playtech Plc vs. Delta Air Lines |
| Raytheon Technologies vs. Samsung Electronics Co | Raytheon Technologies vs. Samsung Electronics Co | Raytheon Technologies vs. Hyundai Motor | Raytheon Technologies vs. Toyota Motor 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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