Correlation Between Raytheon Technologies and BIONTECH

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

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

Diversification Opportunities for Raytheon Technologies and BIONTECH

-0.69

Correlation Coefficient

Raytheon Technologies  BIONTECH

Excellent diversification

The 3 months correlation between Raytheon and BIONTECH is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies and BIONTECH SE DRN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIONTECH SE DRN 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 BIONTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIONTECH SE DRN has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and BIONTECH go up and down completely randomly.

Pair Corralation between Raytheon Technologies and BIONTECH

Assuming the 90 days trading horizon Raytheon Technologies is expected to generate 0.52 times more return on investment than BIONTECH. However, Raytheon Technologies is 1.91 times less risky than BIONTECH. It trades about 0.09 of its potential returns per unit of risk. BIONTECH SE DRN is currently generating about -0.12 per unit of risk. If you would invest  12,014  in Raytheon Technologies on December 26, 2024 and sell it today you would earn a total of  856.00  from holding Raytheon Technologies or generate 7.13% return on investment over 90 days.

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

Raytheon Technologies  vs.  BIONTECH SE DRN

Raytheon Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Raytheon Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Raytheon Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BIONTECH SE DRN

Risk-Adjusted Performance

Very Weak

Over the last 90 days BIONTECH SE DRN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Raytheon Technologies and BIONTECH

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

The idea behind Raytheon Technologies and BIONTECH SE DRN 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.