Correlation Between Tradeweb Markets and Raymond James

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

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

Diversification Opportunities for Tradeweb Markets and Raymond James

0.72

Correlation Coefficient

Tradeweb Markets  Raymond James

Poor diversification

The 3 months correlation between Tradeweb and Raymond is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets 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 Tradeweb Markets 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 Tradeweb Markets 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 Tradeweb Markets i.e., Tradeweb Markets and Raymond James go up and down completely randomly.

Pair Corralation between Tradeweb Markets and Raymond James

Allowing for the 90-day total investment horizon Tradeweb Markets is expected to generate 3.86 times less return on investment than Raymond James. But when comparing it to its historical volatility, Tradeweb Markets is 1.97 times less risky than Raymond James. It trades about 0.13 of its potential returns per unit of risk. Raymond James Financial is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  14,902  in Raymond James Financial on August 30, 2024 and sell it today you would earn a total of  2,108  from holding Raymond James Financial or generate 14.15% return on investment over 90 days.

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

Tradeweb Markets  vs.  Raymond James Financial

Tradeweb Markets

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tradeweb Markets are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Tradeweb Markets showed 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 weak forward-looking indicators, Raymond James reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tradeweb Markets and Raymond James

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

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.