Correlation Between Ryan Specialty and James River

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

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

Diversification Opportunities for Ryan Specialty and James River

-0.05

Correlation Coefficient

Ryan Specialty  James River

Good diversification

The 3 months correlation between Ryan and James is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ryan Specialty Group and James River Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James River Group and Ryan Specialty 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 Ryan Specialty Group are associated (or correlated) with James River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James River Group has no effect on the direction of Ryan Specialty i.e., Ryan Specialty and James River go up and down completely randomly.

Pair Corralation between Ryan Specialty and James River

Given the investment horizon of 90 days Ryan Specialty Group is expected to generate 0.46 times more return on investment than James River. However, Ryan Specialty Group is 2.16 times less risky than James River. It trades about 0.06 of its potential returns per unit of risk. James River Group is currently generating about -0.07 per unit of risk. If you would invest  4,150  in Ryan Specialty Group on September 30, 2024 and sell it today you would earn a total of  2,249  from holding Ryan Specialty Group or generate 54.19% return on investment over 90 days.

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

Ryan Specialty Group  vs.  James River Group

Ryan Specialty Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ryan Specialty Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ryan Specialty is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

James River Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days James River Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Ryan Specialty and James River

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

The idea behind Ryan Specialty Group and James River 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.