Correlation Between Raytheon Technologies and Wesco Aircraft
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and Wesco Aircraft 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 Wesco Aircraft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raytheon Technologies and Wesco Aircraft Holdings, you can compare the effects of market volatilities on Raytheon Technologies and Wesco Aircraft 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 Wesco Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Wesco Aircraft.
Diversification Opportunities for Raytheon Technologies and Wesco Aircraft
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Raytheon and Wesco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies and Wesco Aircraft Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesco Aircraft Holdings 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 Wesco Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesco Aircraft Holdings has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Wesco Aircraft go up and down completely randomly.
Pair Corralation between Raytheon Technologies and Wesco Aircraft
If you would invest (100.00) in Wesco Aircraft Holdings on January 18, 2024 and sell it today you would earn a total of 100.00 from holding Wesco Aircraft Holdings or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Raytheon Technologies vs. Wesco Aircraft Holdings
Performance |
Timeline |
Raytheon Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Wesco Aircraft Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Raytheon Technologies and Wesco Aircraft Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Raytheon Technologies and Wesco Aircraft
The main advantage of trading using opposite Raytheon Technologies and Wesco Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, Wesco Aircraft 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 Wesco Aircraft will offset losses from the drop in Wesco Aircraft's long position.Raytheon Technologies vs. Emerson Electric | Raytheon Technologies vs. Videolocity International | Raytheon Technologies vs. MYR Group | Raytheon Technologies vs. MACOM Technology Solutions |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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