Correlation Between European Metals and Raymond James

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

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

Diversification Opportunities for European Metals and Raymond James

-0.78

Correlation Coefficient

European Metals  Raymond James

Pay attention - limited upside

The 3 months correlation between European and Raymond is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings 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 European Metals 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 European Metals Holdings 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 European Metals i.e., European Metals and Raymond James go up and down completely randomly.

Pair Corralation between European Metals and Raymond James

Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Raymond James. In addition to that, European Metals is 1.4 times more volatile than Raymond James Financial. It trades about -0.04 of its total potential returns per unit of risk. Raymond James Financial is currently generating about 0.14 per unit of volatility. If you would invest  14,520  in Raymond James Financial on October 25, 2024 and sell it today you would earn a total of  2,482  from holding Raymond James Financial or generate 17.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.16%
Values	Daily Returns

European Metals Holdings  vs.  Raymond James Financial

European Metals Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days European Metals Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Raymond James Financial

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Raymond James Financial are ranked lower than 11 (%) 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.

Pair Trading with European Metals and Raymond James

The main advantage of trading using opposite European Metals and Raymond James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals 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 European Metals Holdings 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.