Correlation Between Raytheon and MicroSectorsTM Oil
Can any of the company-specific risk be diversified away by investing in both Raytheon and MicroSectorsTM Oil 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 and MicroSectorsTM Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raytheon Company and MicroSectorsTM Oil Gas, you can compare the effects of market volatilities on Raytheon and MicroSectorsTM Oil 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 with a short position of MicroSectorsTM Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon and MicroSectorsTM Oil.
Diversification Opportunities for Raytheon and MicroSectorsTM Oil
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Raytheon and MicroSectorsTM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Company and MicroSectorsTM Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectorsTM Oil Gas and Raytheon 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 Company are associated (or correlated) with MicroSectorsTM Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectorsTM Oil Gas has no effect on the direction of Raytheon i.e., Raytheon and MicroSectorsTM Oil go up and down completely randomly.
Pair Corralation between Raytheon and MicroSectorsTM Oil
If you would invest (100.00) in Raytheon Company on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Raytheon Company or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Raytheon Company vs. MicroSectorsTM Oil Gas
Performance |
| Timeline |
| Raytheon |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MicroSectorsTM Oil Gas |
Raytheon and MicroSectorsTM Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon and MicroSectorsTM Oil
The main advantage of trading using opposite Raytheon and MicroSectorsTM Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon position performs unexpectedly, MicroSectorsTM Oil 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 MicroSectorsTM Oil will offset losses from the drop in MicroSectorsTM Oil's long position.| Raytheon vs. Park Ohio Holdings | Raytheon vs. DR Horton | Raytheon vs. Hanover Foods | Raytheon vs. EMCOR Group |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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