Correlation Between Raymond James and Carlyle

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

Diversification Opportunities for Raymond James and Carlyle

-0.81

Correlation Coefficient

Raymond James  Carlyle

Pay attention - limited upside

The 3 months correlation between Raymond and Carlyle is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Raymond James Financial and The Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group 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 Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of Raymond James i.e., Raymond James and Carlyle go up and down completely randomly.

Pair Corralation between Raymond James and Carlyle

Assuming the 90 days trading horizon Raymond James is expected to generate 1.9 times less return on investment than Carlyle. But when comparing it to its historical volatility, Raymond James Financial is 4.36 times less risky than Carlyle. It trades about 0.09 of its potential returns per unit of risk. The Carlyle Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,470  in The Carlyle Group on September 24, 2024 and sell it today you would earn a total of  343.00  from holding The Carlyle Group or generate 23.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Raymond James Financial  vs.  The Carlyle Group

Raymond James Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Raymond James Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Raymond James is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Carlyle Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Carlyle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Raymond James and Carlyle

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

The idea behind Raymond James Financial and The Carlyle Group 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..