Correlation Between Raytheon Technologies and VanEck Biotech
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and VanEck Biotech 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 VanEck Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raytheon Technologies and VanEck Biotech ETF, you can compare the effects of market volatilities on Raytheon Technologies and VanEck Biotech 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 VanEck Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and VanEck Biotech.
Diversification Opportunities for Raytheon Technologies and VanEck Biotech
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Raytheon and VanEck is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies and VanEck Biotech ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Biotech ETF 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 VanEck Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Biotech ETF has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and VanEck Biotech go up and down completely randomly.
Pair Corralation between Raytheon Technologies and VanEck Biotech
If you would invest (100.00) in Raytheon Technologies on January 24, 2024 and sell it today you would earn a total of 100.00 from holding Raytheon Technologies 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 Technologies vs. VanEck Biotech ETF
Performance |
| Timeline |
| Raytheon Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| VanEck Biotech ETF |
Raytheon Technologies and VanEck Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and VanEck Biotech
The main advantage of trading using opposite Raytheon Technologies and VanEck Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, VanEck Biotech 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 VanEck Biotech will offset losses from the drop in VanEck Biotech's long position.| Raytheon Technologies vs. Aptiv PLC | Raytheon Technologies vs. Visteon Corp | Raytheon Technologies vs. Dana Inc | Raytheon Technologies vs. Bill Com Holdings |
| VanEck Biotech vs. VanEck Pharmaceutical ETF | VanEck Biotech vs. VanEck Retail ETF | VanEck Biotech vs. First Trust NYSE | VanEck Biotech vs. Invesco Dynamic Biotechnology |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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