Correlation Between Raymond James and Moelis

Can any of the company-specific risk be diversified away by investing in both Raymond James and Moelis 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 Moelis 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 Moelis Co, you can compare the effects of market volatilities on Raymond James and Moelis 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 Moelis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raymond James and Moelis.

Diversification Opportunities for Raymond James and Moelis

0.41

Correlation Coefficient

Raymond James  Moelis

Very weak diversification

The 3 months correlation between Raymond and Moelis is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Raymond James Financial and Moelis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moelis 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 Moelis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moelis has no effect on the direction of Raymond James i.e., Raymond James and Moelis go up and down completely randomly.

Pair Corralation between Raymond James and Moelis

Considering the 90-day investment horizon Raymond James Financial is expected to generate 0.81 times more return on investment than Moelis. However, Raymond James Financial is 1.24 times less risky than Moelis. It trades about -0.32 of its potential returns per unit of risk. Moelis Co is currently generating about -0.33 per unit of risk. If you would invest  12,479  in Raymond James Financial on March 19, 2024 and sell it today you would lose (912.00) from holding Raymond James Financial or give up 7.31% of portfolio value over 90 days.

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

Raymond James Financial  vs.  Moelis Co

Raymond James Financial

Risk-Adjusted Performance

0 of 100

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 nearly stable forward-looking indicators, Raymond James is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Moelis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moelis Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Moelis is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Raymond James and Moelis

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

The idea behind Raymond James Financial and Moelis Co 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.