Correlation Between Raytheon Technologies and AES
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and AES 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 AES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raytheon Technologies and The AES, you can compare the effects of market volatilities on Raytheon Technologies and AES 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 AES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and AES.
Diversification Opportunities for Raytheon Technologies and AES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Raytheon and AES is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies and The AES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AES 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 AES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AES has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and AES go up and down completely randomly.
Pair Corralation between Raytheon Technologies and AES
If you would invest 1,642 in The AES on February 6, 2024 and sell it today you would earn a total of 118.00 from holding The AES or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Raytheon Technologies vs. The AES
Performance |
| Timeline |
| Raytheon Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AES |
Raytheon Technologies and AES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and AES
The main advantage of trading using opposite Raytheon Technologies and AES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, AES 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 AES will offset losses from the drop in AES's long position.| Raytheon Technologies vs. SunOpta | Raytheon Technologies vs. Wizz Air Holdings | Raytheon Technologies vs. Alaska Air Group | Raytheon Technologies vs. Air Lease |
| AES vs. QUEEN S ROAD | AES vs. Fukuyama Transporting Co | AES vs. Gaztransport Technigaz SA | AES vs. Charter Communications |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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