Correlation Between Piper Sandler and Raymond James

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

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

Diversification Opportunities for Piper Sandler and Raymond James

0.8

Correlation Coefficient

Piper Sandler  Raymond James

Very poor diversification

The 3 months correlation between Piper and Raymond is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Piper Sandler Companies 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 Piper Sandler 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 Piper Sandler Companies 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 Piper Sandler i.e., Piper Sandler and Raymond James go up and down completely randomly.

Pair Corralation between Piper Sandler and Raymond James

Given the investment horizon of 90 days Piper Sandler Companies is expected to under-perform the Raymond James. In addition to that, Piper Sandler is 1.28 times more volatile than Raymond James Financial. It trades about -0.33 of its total potential returns per unit of risk. Raymond James Financial is currently generating about -0.24 per unit of volatility. If you would invest  16,492  in Raymond James Financial on October 4, 2024 and sell it today you would lose (992.00) from holding Raymond James Financial or give up 6.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Piper Sandler Companies  vs.  Raymond James Financial

Piper Sandler Companies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Piper Sandler Companies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Piper Sandler is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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. Despite nearly weak forward-looking indicators, Raymond James reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Piper Sandler and Raymond James

The main advantage of trading using opposite Piper Sandler and Raymond James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piper Sandler 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 Piper Sandler Companies 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.

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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.