Correlation Between Raytheon Technologies and Disney

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Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and Disney 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 Disney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raytheon Technologies and Walt Disney, you can compare the effects of market volatilities on Raytheon Technologies and Disney 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 Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Disney.

Diversification Opportunities for Raytheon Technologies and Disney

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Raytheon and Disney is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney 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 Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Disney go up and down completely randomly.

Pair Corralation between Raytheon Technologies and Disney

If you would invest  10,942  in Walt Disney on December 29, 2023 and sell it today you would earn a total of  1,294  from holding Walt Disney or generate 11.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Raytheon Technologies  vs.  Walt Disney

 Performance 
       Timeline  
Raytheon Technologies 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Raytheon Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Raytheon Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Walt Disney 

Risk-Adjusted Performance

20 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Walt Disney are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady forward indicators, Disney unveiled solid returns over the last few months and may actually be approaching a breakup point.

Raytheon Technologies and Disney Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Raytheon Technologies and Disney

The main advantage of trading using opposite Raytheon Technologies and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, Disney 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 Disney will offset losses from the drop in Disney's long position.
The idea behind Raytheon Technologies and Walt Disney pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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