Correlation Between Raytheon Technologies and Telefonaktiebolaget
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and Telefonaktiebolaget 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 Telefonaktiebolaget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raytheon Technologies and Telefonaktiebolaget LM Ericsson, you can compare the effects of market volatilities on Raytheon Technologies and Telefonaktiebolaget 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 Telefonaktiebolaget. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Telefonaktiebolaget.
Diversification Opportunities for Raytheon Technologies and Telefonaktiebolaget
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Raytheon and Telefonaktiebolaget is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies and Telefonaktiebolaget LM Ericsso in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefonaktiebolaget 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 Telefonaktiebolaget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefonaktiebolaget has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Telefonaktiebolaget go up and down completely randomly.
Pair Corralation between Raytheon Technologies and Telefonaktiebolaget
Assuming the 90 days trading horizon Raytheon Technologies is expected to generate 1.61 times less return on investment than Telefonaktiebolaget. But when comparing it to its historical volatility, Raytheon Technologies is 1.54 times less risky than Telefonaktiebolaget. It trades about 0.05 of its potential returns per unit of risk. Telefonaktiebolaget LM Ericsson is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,522 in Telefonaktiebolaget LM Ericsson on September 30, 2024 and sell it today you would earn a total of 948.00 from holding Telefonaktiebolaget LM Ericsson or generate 62.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.03% |
| Values | Daily Returns |
Raytheon Technologies vs. Telefonaktiebolaget LM Ericsso
Performance |
| Timeline |
| Raytheon Technologies |
| Telefonaktiebolaget |
Raytheon Technologies and Telefonaktiebolaget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and Telefonaktiebolaget
The main advantage of trading using opposite Raytheon Technologies and Telefonaktiebolaget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, Telefonaktiebolaget 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 Telefonaktiebolaget will offset losses from the drop in Telefonaktiebolaget's long position.| Raytheon Technologies vs. The Boeing | Raytheon Technologies vs. Lockheed Martin | Raytheon Technologies vs. Northrop Grumman | Raytheon Technologies vs. General Dynamics |
| Telefonaktiebolaget vs. Mliuz SA | Telefonaktiebolaget vs. Locaweb Servios de | Telefonaktiebolaget vs. Pet Center Comrcio | Telefonaktiebolaget vs. Aeris Indstria e |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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 | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Correlations Find global opportunities by holding instruments from different markets |