Correlation Between SLM Corp and Raymond James
Can any of the company-specific risk be diversified away by investing in both SLM Corp 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 SLM Corp and Raymond James into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLM Corp and Raymond James Financial, you can compare the effects of market volatilities on SLM Corp 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 SLM Corp with a short position of Raymond James. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLM Corp and Raymond James.
Diversification Opportunities for SLM Corp and Raymond James
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SLM and Raymond is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SLM Corp 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 SLM Corp 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 SLM Corp 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 SLM Corp i.e., SLM Corp and Raymond James go up and down completely randomly.
Pair Corralation between SLM Corp and Raymond James
Considering the 90-day investment horizon SLM Corp is expected to generate 1.26 times more return on investment than Raymond James. However, SLM Corp is 1.26 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 0.07 per unit of risk. If you would invest 1,545 in SLM Corp on January 24, 2024 and sell it today you would earn a total of 587.00 from holding SLM Corp or generate 37.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLM Corp vs. Raymond James Financial
Performance |
| Timeline |
| SLM Corp |
| Raymond James Financial |
SLM Corp and Raymond James Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLM Corp and Raymond James
The main advantage of trading using opposite SLM Corp and Raymond James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLM Corp 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.| SLM Corp vs. Visa Class A | SLM Corp vs. Mastercard | SLM Corp vs. Oshidori International Holdings | SLM Corp vs. US70082LAB36 |
| Raymond James vs. JPMorgan Chase Co | Raymond James vs. Wells Fargo | Raymond James vs. Citigroup | Raymond James vs. American Express |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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