Correlation Between Raytheon Technologies and Newmont
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and Newmont 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 Newmont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raytheon Technologies and Newmont, you can compare the effects of market volatilities on Raytheon Technologies and Newmont 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 Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Newmont.
Diversification Opportunities for Raytheon Technologies and Newmont
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Raytheon and Newmont is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont 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 Newmont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Newmont go up and down completely randomly.
Pair Corralation between Raytheon Technologies and Newmont
Assuming the 90 days trading horizon Raytheon Technologies is expected to generate 0.5 times more return on investment than Newmont. However, Raytheon Technologies is 2.02 times less risky than Newmont. It trades about 0.02 of its potential returns per unit of risk. Newmont is currently generating about -0.12 per unit of risk. If you would invest 11,554 in Raytheon Technologies on September 13, 2024 and sell it today you would earn a total of 74.00 from holding Raytheon Technologies or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Raytheon Technologies vs. Newmont
Performance |
| Timeline |
| Raytheon Technologies |
| Newmont |
Raytheon Technologies and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and Newmont
The main advantage of trading using opposite Raytheon Technologies and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, Newmont 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 Newmont will offset losses from the drop in Newmont's long position.| Raytheon Technologies vs. Take Two Interactive Software | Raytheon Technologies vs. British American Tobacco | Raytheon Technologies vs. Delta Air Lines | Raytheon Technologies vs. Spotify Technology SA |
| Newmont vs. Paycom Software | Newmont vs. Lupatech SA | Newmont vs. Agilent Technologies | Newmont vs. Raytheon 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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