Correlation Between Raytheon Technologies and Banco Do
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and Banco Do 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 Banco Do into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raytheon Technologies and Banco do Estado, you can compare the effects of market volatilities on Raytheon Technologies and Banco Do 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 Banco Do. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Banco Do.
Diversification Opportunities for Raytheon Technologies and Banco Do
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Raytheon and Banco is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies and Banco do Estado in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco do Estado 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 are associated (or correlated) with Banco Do. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco do Estado has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Banco Do go up and down completely randomly.
Pair Corralation between Raytheon Technologies and Banco Do
Assuming the 90 days trading horizon Raytheon Technologies is expected to generate 0.72 times more return on investment than Banco Do. However, Raytheon Technologies is 1.39 times less risky than Banco Do. It trades about 0.12 of its potential returns per unit of risk. Banco do Estado is currently generating about -0.01 per unit of risk. If you would invest 6,958 in Raytheon Technologies on September 12, 2024 and sell it today you would earn a total of 4,912 from holding Raytheon Technologies or generate 70.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.82% |
| Values | Daily Returns |
Raytheon Technologies vs. Banco do Estado
Performance |
| Timeline |
| Raytheon Technologies |
| Banco do Estado |
Raytheon Technologies and Banco Do Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and Banco Do
The main advantage of trading using opposite Raytheon Technologies and Banco Do positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, Banco Do 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 Banco Do will offset losses from the drop in Banco Do's long position.| Raytheon Technologies vs. Take Two Interactive Software | Raytheon Technologies vs. Delta Air Lines | Raytheon Technologies vs. GX AI TECH | Raytheon Technologies vs. Uber Technologies |
| Banco Do vs. BIONTECH SE DRN | Banco Do vs. Uber Technologies | Banco Do vs. Raytheon Technologies | Banco Do vs. Align Technology |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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