Correlation Between Cleantech Power and RAYTHEON

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

By analyzing existing cross correlation between Cleantech Power Corp and RAYTHEON TECHNOLOGIES PORATION, you can compare the effects of market volatilities on Cleantech Power and RAYTHEON 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 Cleantech Power with a short position of RAYTHEON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleantech Power and RAYTHEON.

Diversification Opportunities for Cleantech Power and RAYTHEON

0.0

Correlation Coefficient

Cleantech Power  RAYTHEON

Pay attention - limited upside

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

Pair Corralation between Cleantech Power and RAYTHEON

If you would invest  6,383  in RAYTHEON TECHNOLOGIES PORATION on October 12, 2024 and sell it today you would earn a total of  185.00  from holding RAYTHEON TECHNOLOGIES PORATION or generate 2.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	85.0%
Values	Daily Returns

Cleantech Power Corp  vs.  RAYTHEON TECHNOLOGIES PORATION

Cleantech Power Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cleantech Power Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cleantech Power is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

RAYTHEON TECHNOLOGIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RAYTHEON TECHNOLOGIES PORATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, RAYTHEON is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cleantech Power and RAYTHEON

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

The idea behind Cleantech Power Corp and RAYTHEON TECHNOLOGIES PORATION 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.