Correlation Between Raytheon Technologies and Lupatech
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and Lupatech 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 Lupatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raytheon Technologies and Lupatech SA, you can compare the effects of market volatilities on Raytheon Technologies and Lupatech 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 Lupatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Lupatech.
Diversification Opportunities for Raytheon Technologies and Lupatech
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Raytheon and Lupatech is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA 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 Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Lupatech go up and down completely randomly.
Pair Corralation between Raytheon Technologies and Lupatech
Assuming the 90 days trading horizon Raytheon Technologies is expected to generate 0.55 times more return on investment than Lupatech. However, Raytheon Technologies is 1.81 times less risky than Lupatech. It trades about 0.08 of its potential returns per unit of risk. Lupatech SA is currently generating about -0.06 per unit of risk. If you would invest 7,743 in Raytheon Technologies on August 30, 2024 and sell it today you would earn a total of 4,160 from holding Raytheon Technologies or generate 53.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.21% |
| Values | Daily Returns |
Raytheon Technologies vs. Lupatech SA
Performance |
| Timeline |
| Raytheon Technologies |
| Lupatech SA |
Raytheon Technologies and Lupatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and Lupatech
The main advantage of trading using opposite Raytheon Technologies and Lupatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, Lupatech 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 Lupatech will offset losses from the drop in Lupatech's long position.| Raytheon Technologies vs. Micron Technology | Raytheon Technologies vs. Spotify Technology SA | Raytheon Technologies vs. Charter Communications | Raytheon Technologies vs. Lupatech SA |
| Lupatech vs. PDG Realty SA | Lupatech vs. Positivo Tecnologia SA | Lupatech vs. Rossi Residencial SA | Lupatech vs. Eternit SA |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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