Correlation Between Raytheon Technologies and Satellogic

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

Diversification Opportunities for Raytheon Technologies and Satellogic

-0.02

Correlation Coefficient

Raytheon Technologies  Satellogic

Good diversification

The 3 months correlation between Raytheon and Satellogic is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and Satellogic V in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satellogic V 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 Satellogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satellogic V has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Satellogic go up and down completely randomly.

Pair Corralation between Raytheon Technologies and Satellogic

Considering the 90-day investment horizon Raytheon Technologies is expected to generate 77.65 times less return on investment than Satellogic. But when comparing it to its historical volatility, Raytheon Technologies Corp is 6.81 times less risky than Satellogic. It trades about 0.01 of its potential returns per unit of risk. Satellogic V is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  280.00  in Satellogic V on December 5, 2024 and sell it today you would earn a total of  49.00  from holding Satellogic V or generate 17.5% return on investment over 90 days.

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

Raytheon Technologies Corp  vs.  Satellogic V

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 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Raytheon Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Satellogic V

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Satellogic V are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Satellogic disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Raytheon Technologies and Satellogic

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

The idea behind Raytheon Technologies Corp and Satellogic V 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.