Correlation Between Raytheon Technologies and Boeing
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and Boeing 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 Raytheon Technologies and Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raytheon Technologies Corp and The Boeing, you can compare the effects of market volatilities on Raytheon Technologies and Boeing 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 Raytheon Technologies with a short position of Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Boeing.
Diversification Opportunities for Raytheon Technologies and Boeing
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Raytheon and Boeing is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and Raytheon Technologies 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 Raytheon Technologies Corp are associated (or correlated) with Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Boeing go up and down completely randomly.
Pair Corralation between Raytheon Technologies and Boeing
Considering the 90-day investment horizon Raytheon Technologies Corp is expected to under-perform the Boeing. But the stock apears to be less risky and, when comparing its historical volatility, Raytheon Technologies Corp is 1.53 times less risky than Boeing. The stock trades about -0.1 of its potential returns per unit of risk. The The Boeing is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 15,069 in The Boeing on August 27, 2024 and sell it today you would lose (140.00) from holding The Boeing or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raytheon Technologies Corp vs. The Boeing
Performance |
| Timeline |
| Raytheon Technologies |
| Boeing |
Raytheon Technologies and Boeing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and Boeing
The main advantage of trading using opposite Raytheon Technologies and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.| Raytheon Technologies vs. Northrop Grumman | Raytheon Technologies vs. General Dynamics | Raytheon Technologies vs. The Boeing | Raytheon Technologies vs. L3Harris Technologies |
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.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |