Correlation Between Raymond James and Western Union
Can any of the company-specific risk be diversified away by investing in both Raymond James and Western Union 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 Western Union 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 Western Union Co, you can compare the effects of market volatilities on Raymond James and Western Union 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 Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raymond James and Western Union.
Diversification Opportunities for Raymond James and Western Union
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Raymond and Western is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Raymond James Financial and Western Union Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union 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 Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of Raymond James i.e., Raymond James and Western Union go up and down completely randomly.
Pair Corralation between Raymond James and Western Union
Considering the 90-day investment horizon Raymond James Financial is expected to generate 1.04 times more return on investment than Western Union. However, Raymond James is 1.04 times more volatile than Western Union Co. It trades about 0.07 of its potential returns per unit of risk. Western Union Co is currently generating about -0.22 per unit of risk. If you would invest 12,053 in Raymond James Financial on January 16, 2024 and sell it today you would earn a total of 199.00 from holding Raymond James Financial or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raymond James Financial vs. Western Union Co
Performance |
| Timeline |
| Raymond James Financial |
| Western Union |
Raymond James and Western Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raymond James and Western Union
The main advantage of trading using opposite Raymond James and Western Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raymond James position performs unexpectedly, Western Union 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 Western Union will offset losses from the drop in Western Union's long position.| Raymond James vs. JPMorgan Chase Co | Raymond James vs. Wells Fargo | Raymond James vs. Citigroup | Raymond James vs. American Express |
| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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