Correlation Between Raymond James and Capital Metals

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

By analyzing existing cross correlation between Raymond James Financial and Capital Metals PLC, you can compare the effects of market volatilities on Raymond James and Capital Metals 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 Raymond James with a short position of Capital Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raymond James and Capital Metals.

Diversification Opportunities for Raymond James and Capital Metals

-0.22

Correlation Coefficient

Raymond James  Capital Metals

Very good diversification

The 3 months correlation between Raymond and Capital is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Raymond James Financial and Capital Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Metals PLC and Raymond James 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 Raymond James Financial are associated (or correlated) with Capital Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Metals PLC has no effect on the direction of Raymond James i.e., Raymond James and Capital Metals go up and down completely randomly.

Pair Corralation between Raymond James and Capital Metals

Assuming the 90 days trading horizon Raymond James Financial is expected to generate 1.14 times more return on investment than Capital Metals. However, Raymond James is 1.14 times more volatile than Capital Metals PLC. It trades about 0.01 of its potential returns per unit of risk. Capital Metals PLC is currently generating about -0.33 per unit of risk. If you would invest  15,933  in Raymond James Financial on October 10, 2024 and sell it today you would lose (6.00) from holding Raymond James Financial or give up 0.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.47%
Values	Daily Returns

Raymond James Financial  vs.  Capital Metals PLC

Raymond James Financial

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Raymond James Financial are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Raymond James unveiled solid returns over the last few months and may actually be approaching a breakup point.

Capital Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Capital Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Raymond James and Capital Metals

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

The idea behind Raymond James Financial and Capital Metals PLC 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .