Correlation Between Raytheon Technologies and SAFEROADS HLDGS

Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and SAFEROADS HLDGS 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 SAFEROADS HLDGS 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 SAFEROADS HLDGS, you can compare the effects of market volatilities on Raytheon Technologies and SAFEROADS HLDGS 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 SAFEROADS HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and SAFEROADS HLDGS.

Diversification Opportunities for Raytheon Technologies and SAFEROADS HLDGS

0.0

Correlation Coefficient

Raytheon Technologies  SAFEROADS HLDGS

Pay attention - limited upside

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

Pair Corralation between Raytheon Technologies and SAFEROADS HLDGS

If you would invest  11,097  in Raytheon Technologies Corp on December 23, 2024 and sell it today you would earn a total of  1,249  from holding Raytheon Technologies Corp or generate 11.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Raytheon Technologies Corp  vs.  SAFEROADS HLDGS

Raytheon Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Raytheon Technologies Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Raytheon Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

SAFEROADS HLDGS

Risk-Adjusted Performance

Very Weak

Over the last 90 days SAFEROADS HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SAFEROADS HLDGS is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Raytheon Technologies and SAFEROADS HLDGS

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

The idea behind Raytheon Technologies Corp and SAFEROADS HLDGS 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.