Correlation Between Raymond James and Virtu Financial
Can any of the company-specific risk be diversified away by investing in both Raymond James and Virtu 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 Virtu 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 Virtu Financial, you can compare the effects of market volatilities on Raymond James and Virtu 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 Virtu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raymond James and Virtu Financial.
Diversification Opportunities for Raymond James and Virtu Financial
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Raymond and Virtu is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Raymond James Financial and Virtu Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtu 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 Virtu Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtu Financial has no effect on the direction of Raymond James i.e., Raymond James and Virtu Financial go up and down completely randomly.
Pair Corralation between Raymond James and Virtu Financial
Considering the 90-day investment horizon Raymond James is expected to generate 1.49 times less return on investment than Virtu Financial. But when comparing it to its historical volatility, Raymond James Financial is 1.42 times less risky than Virtu Financial. It trades about 0.16 of its potential returns per unit of risk. Virtu Financial is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,256 in Virtu Financial on September 1, 2024 and sell it today you would earn a total of 1,475 from holding Virtu Financial or generate 65.38% 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. Virtu Financial
Performance |
| Timeline |
| Raymond James Financial |
| Virtu Financial |
Raymond James and Virtu Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raymond James and Virtu Financial
The main advantage of trading using opposite Raymond James and Virtu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raymond James position performs unexpectedly, Virtu 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 Virtu Financial will offset losses from the drop in Virtu Financial's long position.| Raymond James vs. Tradeweb Markets | Raymond James vs. PJT Partners | Raymond James vs. Moelis Co | Raymond James vs. LPL Financial Holdings |
| Virtu Financial vs. Perella Weinberg Partners | Virtu Financial vs. Evercore Partners | Virtu Financial vs. Lazard | Virtu Financial vs. Piper Sandler Companies |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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