Correlation Between Xeros Technology and Raytheon Technologies
Can any of the company-specific risk be diversified away by investing in both Xeros Technology 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 Xeros Technology and Raytheon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xeros Technology Group and Raytheon Technologies Corp, you can compare the effects of market volatilities on Xeros Technology 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 Xeros Technology with a short position of Raytheon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xeros Technology and Raytheon Technologies.
Diversification Opportunities for Xeros Technology and Raytheon Technologies
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xeros and Raytheon is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Xeros Technology Group and Raytheon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytheon Technologies and Xeros Technology 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 Xeros Technology Group 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 Xeros Technology i.e., Xeros Technology and Raytheon Technologies go up and down completely randomly.
Pair Corralation between Xeros Technology and Raytheon Technologies
Assuming the 90 days trading horizon Xeros Technology Group is expected to generate 4.96 times more return on investment than Raytheon Technologies. However, Xeros Technology is 4.96 times more volatile than Raytheon Technologies Corp. It trades about 0.12 of its potential returns per unit of risk. Raytheon Technologies Corp is currently generating about 0.13 per unit of risk. If you would invest 43.00 in Xeros Technology Group on October 26, 2024 and sell it today you would earn a total of 10.00 from holding Xeros Technology Group or generate 23.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xeros Technology Group vs. Raytheon Technologies Corp
Performance |
| Timeline |
| Xeros Technology |
| Raytheon Technologies |
Xeros Technology and Raytheon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xeros Technology and Raytheon Technologies
The main advantage of trading using opposite Xeros Technology and Raytheon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xeros Technology 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.| Xeros Technology vs. SupplyMe Capital PLC | Xeros Technology vs. Grand Vision Media | Xeros Technology vs. Overstock | Xeros Technology vs. DG Innovate PLC |
| Raytheon Technologies vs. Cairo Communication SpA | Raytheon Technologies vs. Verizon Communications | Raytheon Technologies vs. Aeorema Communications Plc | Raytheon Technologies vs. Arrow Electronics |
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 CEOs Directory module to screen CEOs from public companies around the world.
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