Correlation Between Symphony Environmental and Raytheon Technologies
Can any of the company-specific risk be diversified away by investing in both Symphony Environmental and Raytheon Technologies 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 Symphony Environmental and Raytheon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Symphony Environmental Technologies and Raytheon Technologies Corp, you can compare the effects of market volatilities on Symphony Environmental and Raytheon Technologies 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 Symphony Environmental with a short position of Raytheon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symphony Environmental and Raytheon Technologies.
Diversification Opportunities for Symphony Environmental and Raytheon Technologies
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Symphony and Raytheon is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Symphony Environmental Technol and Raytheon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytheon Technologies and Symphony Environmental 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 Symphony Environmental Technologies are associated (or correlated) with Raytheon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raytheon Technologies has no effect on the direction of Symphony Environmental i.e., Symphony Environmental and Raytheon Technologies go up and down completely randomly.
Pair Corralation between Symphony Environmental and Raytheon Technologies
Assuming the 90 days trading horizon Symphony Environmental Technologies is expected to under-perform the Raytheon Technologies. In addition to that, Symphony Environmental is 2.89 times more volatile than Raytheon Technologies Corp. It trades about -0.07 of its total potential returns per unit of risk. Raytheon Technologies Corp is currently generating about -0.19 per unit of volatility. If you would invest 12,300 in Raytheon Technologies Corp on September 14, 2024 and sell it today you would lose (595.00) from holding Raytheon Technologies Corp or give up 4.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Symphony Environmental Technol vs. Raytheon Technologies Corp
Performance |
| Timeline |
| Symphony Environmental |
| Raytheon Technologies |
Symphony Environmental and Raytheon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symphony Environmental and Raytheon Technologies
The main advantage of trading using opposite Symphony Environmental and Raytheon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symphony Environmental position performs unexpectedly, Raytheon Technologies 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 Raytheon Technologies will offset losses from the drop in Raytheon Technologies' long position.| Symphony Environmental vs. CVS Health Corp | Symphony Environmental vs. PureTech Health plc | Symphony Environmental vs. Planet Fitness Cl | Symphony Environmental vs. Lords Grp Trading |
| Raytheon Technologies vs. Samsung Electronics Co | Raytheon Technologies vs. Samsung Electronics Co | Raytheon Technologies vs. Hyundai Motor | Raytheon Technologies vs. Reliance Industries Ltd |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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