Correlation Between United States and Raytheon Technologies
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Raytheon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Raytheon Technologies, you can compare the effects of market volatilities on United States 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 United States with a short position of Raytheon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Raytheon Technologies.
Diversification Opportunities for United States and Raytheon Technologies
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Raytheon is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Raytheon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytheon Technologies and United States 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 United States Steel 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 United States i.e., United States and Raytheon Technologies go up and down completely randomly.
Pair Corralation between United States and Raytheon Technologies
Assuming the 90 days trading horizon United States Steel is expected to generate 2.05 times more return on investment than Raytheon Technologies. However, United States is 2.05 times more volatile than Raytheon Technologies. It trades about 0.06 of its potential returns per unit of risk. Raytheon Technologies is currently generating about 0.07 per unit of risk. If you would invest 10,821 in United States Steel on September 19, 2024 and sell it today you would earn a total of 8,439 from holding United States Steel or generate 77.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.91% |
| Values | Daily Returns |
United States Steel vs. Raytheon Technologies
Performance |
| Timeline |
| United States Steel |
| Raytheon Technologies |
United States and Raytheon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Raytheon Technologies
The main advantage of trading using opposite United States and Raytheon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Companhia Siderrgica Nacional | United States vs. Metalurgica Gerdau SA | United States vs. Metalurgica Gerdau SA | United States vs. Usinas Siderrgicas de |
| Raytheon Technologies vs. Taurus Armas SA | Raytheon Technologies vs. Schulz SA | Raytheon Technologies vs. Petro Rio SA | Raytheon Technologies vs. Movida Participaes 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |