Correlation Between Raytheon Technologies and Moneysupermarket

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

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

Diversification Opportunities for Raytheon Technologies and Moneysupermarket

0.04

Correlation Coefficient

Raytheon Technologies  Moneysupermarket

Significant diversification

The 3 months correlation between Raytheon and Moneysupermarket is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and MoneysupermarketCom Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneysupermarketCom 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 Corp are associated (or correlated) with Moneysupermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneysupermarketCom has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Moneysupermarket go up and down completely randomly.

Pair Corralation between Raytheon Technologies and Moneysupermarket

Assuming the 90 days trading horizon Raytheon Technologies Corp is expected to generate 0.94 times more return on investment than Moneysupermarket. However, Raytheon Technologies Corp is 1.07 times less risky than Moneysupermarket. It trades about 0.17 of its potential returns per unit of risk. MoneysupermarketCom Group PLC is currently generating about 0.01 per unit of risk. If you would invest  11,850  in Raytheon Technologies Corp on December 4, 2024 and sell it today you would earn a total of  1,581  from holding Raytheon Technologies Corp or generate 13.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Raytheon Technologies Corp  vs.  MoneysupermarketCom Group PLC

Raytheon Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Raytheon Technologies Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Raytheon Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

MoneysupermarketCom

Risk-Adjusted Performance

Very Weak

Over the last 90 days MoneysupermarketCom Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Moneysupermarket is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Raytheon Technologies and Moneysupermarket

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

The idea behind Raytheon Technologies Corp and MoneysupermarketCom Group PLC 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.