Correlation Between Raytheon Technologies and ProShares Ultra

Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and ProShares Ultra 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 ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Raytheon Technologies and ProShares Ultra Bloomberg, you can compare the effects of market volatilities on Raytheon Technologies and ProShares Ultra 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 ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and ProShares Ultra.

Diversification Opportunities for Raytheon Technologies and ProShares Ultra

0.0

Correlation Coefficient

Raytheon Technologies  ProShares Ultra

Pay attention - limited upside

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

Pair Corralation between Raytheon Technologies and ProShares Ultra

If you would invest  2,842  in ProShares Ultra Bloomberg on January 19, 2024 and sell it today you would earn a total of  483.00  from holding ProShares Ultra Bloomberg or generate 17.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Raytheon Technologies  vs.  ProShares Ultra Bloomberg

Raytheon Technologies

Risk-Adjusted Performance

0 of 100

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 current stock price disturbance, may contribute to short-term losses for the investors.

ProShares Ultra Bloomberg

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra Bloomberg are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, ProShares Ultra displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Raytheon Technologies and ProShares Ultra

The main advantage of trading using opposite Raytheon Technologies and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, ProShares Ultra 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 ProShares Ultra will offset losses from the drop in ProShares Ultra's long position.

The idea behind Raytheon Technologies and ProShares Ultra Bloomberg 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.