Correlation Between Washington Federal and Raymond James

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

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

Diversification Opportunities for Washington Federal and Raymond James

-0.79

Correlation Coefficient

Washington Federal  Raymond James

Pay attention - limited upside

The 3 months correlation between Washington and Raymond is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal 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 Washington Federal 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 Washington Federal 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 Washington Federal i.e., Washington Federal and Raymond James go up and down completely randomly.

Pair Corralation between Washington Federal and Raymond James

Assuming the 90 days horizon Washington Federal is expected to under-perform the Raymond James. In addition to that, Washington Federal is 4.74 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 0.17 per unit of volatility. If you would invest  2,469  in Raymond James Financial on December 31, 2024 and sell it today you would earn a total of  51.00  from holding Raymond James Financial or generate 2.07% return on investment over 90 days.

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

Washington Federal  vs.  Raymond James Financial

Washington Federal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Washington Federal has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Washington Federal 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

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 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.

Pair Trading with Washington Federal and Raymond James

The main advantage of trading using opposite Washington Federal and Raymond James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Federal 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 Washington Federal 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.