Correlation Between Raymond James and Jefferies Financial
Can any of the company-specific risk be diversified away by investing in both Raymond James and Jefferies Financial 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 Jefferies Financial 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 Jefferies Financial Group, you can compare the effects of market volatilities on Raymond James and Jefferies Financial 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 Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raymond James and Jefferies Financial.
Diversification Opportunities for Raymond James and Jefferies Financial
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Raymond and Jefferies is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Raymond James Financial and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial 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 Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Raymond James i.e., Raymond James and Jefferies Financial go up and down completely randomly.
Pair Corralation between Raymond James and Jefferies Financial
Assuming the 90 days trading horizon Raymond James is expected to generate 35.76 times less return on investment than Jefferies Financial. But when comparing it to its historical volatility, Raymond James Financial is 28.46 times less risky than Jefferies Financial. It trades about 0.29 of its potential returns per unit of risk. Jefferies Financial Group is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 6,428 in Jefferies Financial Group on August 31, 2024 and sell it today you would earn a total of 1,465 from holding Jefferies Financial Group or generate 22.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raymond James Financial vs. Jefferies Financial Group
Performance |
| Timeline |
| Raymond James Financial |
| Jefferies Financial |
Raymond James and Jefferies Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raymond James and Jefferies Financial
The main advantage of trading using opposite Raymond James and Jefferies Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raymond James position performs unexpectedly, Jefferies Financial 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 Jefferies Financial will offset losses from the drop in Jefferies Financial's long position.| Raymond James vs. Washington Federal | Raymond James vs. Truist Financial | Raymond James vs. The Charles Schwab | Raymond James vs. Associated Banc Corp |
| Jefferies Financial vs. Lazard | Jefferies Financial vs. PJT Partners | Jefferies Financial vs. Moelis Co | Jefferies Financial vs. Houlihan Lokey |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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