Correlation Between Citigroup and Raymond James
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and Raymond James into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Raymond James Financial, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of Raymond James. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Raymond James.
Diversification Opportunities for Citigroup and Raymond James
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Raymond is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup 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 Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and Raymond James go up and down completely randomly.
Pair Corralation between Citigroup and Raymond James
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.29 times less return on investment than Raymond James. In addition to that, Citigroup is 1.04 times more volatile than Raymond James Financial. It trades about 0.08 of its total potential returns per unit of risk. Raymond James Financial is currently generating about 0.11 per unit of volatility. If you would invest 9,329 in Raymond James Financial on August 31, 2024 and sell it today you would earn a total of 7,599 from holding Raymond James Financial or generate 81.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Raymond James Financial
Performance |
| Timeline |
| Citigroup |
| Raymond James Financial |
Citigroup and Raymond James Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Raymond James
The main advantage of trading using opposite Citigroup and Raymond James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Raymond James vs. Tradeweb Markets | Raymond James vs. PJT Partners | Raymond James vs. Moelis Co | Raymond James vs. LPL Financial Holdings |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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