Correlation Between Stonex and Raymond James

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

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

Diversification Opportunities for Stonex and Raymond James

-0.22

Correlation Coefficient

Stonex  Raymond James

Very good diversification

The 3 months correlation between Stonex and Raymond is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Stonex Group 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 Stonex 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 Stonex Group 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 Stonex i.e., Stonex and Raymond James go up and down completely randomly.

Pair Corralation between Stonex and Raymond James

Given the investment horizon of 90 days Stonex Group is expected to generate 1.46 times more return on investment than Raymond James. However, Stonex is 1.46 times more volatile than Raymond James Financial. It trades about 0.11 of its potential returns per unit of risk. Raymond James Financial is currently generating about -0.1 per unit of risk. If you would invest  6,544  in Stonex Group on December 29, 2024 and sell it today you would earn a total of  1,068  from holding Stonex Group or generate 16.32% return on investment over 90 days.

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

Stonex Group  vs.  Raymond James Financial

Stonex Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stonex Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Stonex showed solid returns over the last few months and may actually be approaching a breakup point.

Raymond James Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Raymond James Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Stonex and Raymond James

The main advantage of trading using opposite Stonex and Raymond James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stonex 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 Stonex Group 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.