Correlation Between Champion Gaming and RAYTHEON

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

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

Diversification Opportunities for Champion Gaming and RAYTHEON

-0.68

Correlation Coefficient

Champion Gaming  RAYTHEON

Excellent diversification

The 3 months correlation between Champion and RAYTHEON is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Champion Gaming Group and RAYTHEON TECHNOLOGIES PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RAYTHEON TECHNOLOGIES and Champion Gaming 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 Champion Gaming Group 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 Champion Gaming i.e., Champion Gaming and RAYTHEON go up and down completely randomly.

Pair Corralation between Champion Gaming and RAYTHEON

Assuming the 90 days horizon Champion Gaming Group is expected to under-perform the RAYTHEON. In addition to that, Champion Gaming is 9.79 times more volatile than RAYTHEON TECHNOLOGIES PORATION. It trades about -0.13 of its total potential returns per unit of risk. RAYTHEON TECHNOLOGIES PORATION is currently generating about -0.07 per unit of volatility. If you would invest  8,234  in RAYTHEON TECHNOLOGIES PORATION on December 25, 2024 and sell it today you would lose (446.00) from holding RAYTHEON TECHNOLOGIES PORATION or give up 5.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.22%
Values	Daily Returns

Champion Gaming Group  vs.  RAYTHEON TECHNOLOGIES PORATION

Champion Gaming Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Champion Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

RAYTHEON TECHNOLOGIES

Risk-Adjusted Performance

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 new stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Champion Gaming and RAYTHEON

The main advantage of trading using opposite Champion Gaming and RAYTHEON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Gaming 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 Champion Gaming Group 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.