Correlation Between BYD and Raymond James

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

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

Diversification Opportunities for BYD and Raymond James

-0.27

Correlation Coefficient

BYD  Raymond James

Very good diversification

The 3 months correlation between BYD and Raymond is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and Raymond James Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raymond James Financial and BYD 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 BYD Co are associated (or correlated) with Raymond James. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raymond James Financial has no effect on the direction of BYD i.e., BYD and Raymond James go up and down completely randomly.

Pair Corralation between BYD and Raymond James

Assuming the 90 days trading horizon BYD Co is expected to generate 8.95 times more return on investment than Raymond James. However, BYD is 8.95 times more volatile than Raymond James Financial. It trades about 0.05 of its potential returns per unit of risk. Raymond James Financial is currently generating about 0.06 per unit of risk. If you would invest  3,505  in BYD Co on October 10, 2024 and sell it today you would earn a total of  55.00  from holding BYD Co or generate 1.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.32%
Values	Daily Returns

BYD Co  vs.  Raymond James Financial

BYD Co

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BYD Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BYD may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 unsteady basic indicators, Raymond James unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BYD and Raymond James

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

The idea behind BYD Co and Raymond James Financial 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.

Check out your portfolio center.

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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.