Correlation Between Raymond James and MG Credit

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

Diversification Opportunities for Raymond James and MG Credit

0.48

Correlation Coefficient

Raymond James  MG Credit

Very weak diversification

The 3 months correlation between Raymond and MGCI is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Raymond James Financial and MG Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MG Credit Income 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 MG Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MG Credit Income has no effect on the direction of Raymond James i.e., Raymond James and MG Credit go up and down completely randomly.

Pair Corralation between Raymond James and MG Credit

Assuming the 90 days trading horizon Raymond James Financial is expected to under-perform the MG Credit. In addition to that, Raymond James is 2.66 times more volatile than MG Credit Income. It trades about -0.03 of its total potential returns per unit of risk. MG Credit Income is currently generating about 0.04 per unit of volatility. If you would invest  9,600  in MG Credit Income on October 12, 2024 and sell it today you would earn a total of  50.00  from holding MG Credit Income or generate 0.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	84.21%
Values	Daily Returns

Raymond James Financial  vs.  MG Credit Income

Raymond James Financial

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Raymond James Financial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Raymond James unveiled solid returns over the last few months and may actually be approaching a breakup point.

MG Credit Income

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MG Credit Income are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MG Credit 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 MG Credit

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

The idea behind Raymond James Financial and MG Credit Income 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.