Correlation Between Applied Blockchain and Raymond James

Can any of the company-specific risk be diversified away by investing in both Applied Blockchain 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 Applied Blockchain and Raymond James into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Applied Blockchain and Raymond James Financial, you can compare the effects of market volatilities on Applied Blockchain 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 Applied Blockchain with a short position of Raymond James. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Blockchain and Raymond James.

Diversification Opportunities for Applied Blockchain and Raymond James

0.63

Correlation Coefficient

Applied Blockchain  Raymond James

Poor diversification

The 3 months correlation between Applied and Raymond is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Applied Blockchain 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 Applied Blockchain 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 Applied Blockchain 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 Applied Blockchain i.e., Applied Blockchain and Raymond James go up and down completely randomly.

Pair Corralation between Applied Blockchain and Raymond James

Given the investment horizon of 90 days Applied Blockchain is expected to generate 6.07 times more return on investment than Raymond James. However, Applied Blockchain is 6.07 times more volatile than Raymond James Financial. It trades about 0.2 of its potential returns per unit of risk. Raymond James Financial is currently generating about 0.3 per unit of risk. If you would invest  315.00  in Applied Blockchain on September 3, 2024 and sell it today you would earn a total of  695.00  from holding Applied Blockchain or generate 220.63% return on investment over 90 days.

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

Applied Blockchain  vs.  Raymond James Financial

Applied Blockchain

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Blockchain are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Applied Blockchain exhibited solid returns over the last few months and may actually be approaching a breakup point.

Raymond James Financial

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Raymond James Financial are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking indicators, Raymond James reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Applied Blockchain and Raymond James

The main advantage of trading using opposite Applied Blockchain and Raymond James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Blockchain 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.

The idea behind Applied Blockchain and Raymond James Financial 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..