Correlation Between Raymond James and Ondine Biomedical

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

Diversification Opportunities for Raymond James and Ondine Biomedical

0.63

Correlation Coefficient

Raymond James  Ondine Biomedical

Poor diversification

The 3 months correlation between Raymond and Ondine is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Raymond James Financial and Ondine Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ondine Biomedical 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 Ondine Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ondine Biomedical has no effect on the direction of Raymond James i.e., Raymond James and Ondine Biomedical go up and down completely randomly.

Pair Corralation between Raymond James and Ondine Biomedical

Assuming the 90 days trading horizon Raymond James Financial is expected to generate 0.36 times more return on investment than Ondine Biomedical. However, Raymond James Financial is 2.77 times less risky than Ondine Biomedical. It trades about 0.11 of its potential returns per unit of risk. Ondine Biomedical is currently generating about 0.02 per unit of risk. If you would invest  10,642  in Raymond James Financial on October 9, 2024 and sell it today you would earn a total of  5,285  from holding Raymond James Financial or generate 49.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.17%
Values	Daily Returns

Raymond James Financial  vs.  Ondine Biomedical

Raymond James Financial

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Raymond James Financial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Raymond James unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ondine Biomedical

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ondine Biomedical are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Ondine Biomedical exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Raymond James and Ondine Biomedical

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

The idea behind Raymond James Financial and Ondine Biomedical 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.