Correlation Between Trinity Industries and Raytheon Technologies
Can any of the company-specific risk be diversified away by investing in both Trinity Industries 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 Trinity Industries and Raytheon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trinity Industries and Raytheon Technologies, you can compare the effects of market volatilities on Trinity Industries 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 Trinity Industries with a short position of Raytheon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trinity Industries and Raytheon Technologies.
Diversification Opportunities for Trinity Industries and Raytheon Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Trinity and Raytheon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Trinity Industries and Raytheon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytheon Technologies and Trinity Industries 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 Trinity Industries 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 Trinity Industries i.e., Trinity Industries and Raytheon Technologies go up and down completely randomly.
Pair Corralation between Trinity Industries and Raytheon Technologies
If you would invest 2,716 in Trinity Industries on January 26, 2024 and sell it today you would earn a total of 2.00 from holding Trinity Industries or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Trinity Industries vs. Raytheon Technologies
Performance |
| Timeline |
| Trinity Industries |
| Raytheon Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Trinity Industries and Raytheon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trinity Industries and Raytheon Technologies
The main advantage of trading using opposite Trinity Industries and Raytheon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trinity Industries 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.| Trinity Industries vs. LB Foster | Trinity Industries vs. CSX Corporation | Trinity Industries vs. Norfolk Southern | Trinity Industries vs. Union Pacific |
| Raytheon Technologies vs. Zhihu Inc ADR | Raytheon Technologies vs. Simon Property Group | Raytheon Technologies vs. Dave Busters Entertainment | Raytheon Technologies vs. Pinterest |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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