Correlation Between Raymond James and Itau Unibanco

Can any of the company-specific risk be diversified away by investing in both Raymond James and Itau Unibanco 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 Itau Unibanco 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 Itau Unibanco Banco, you can compare the effects of market volatilities on Raymond James and Itau Unibanco 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 Itau Unibanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raymond James and Itau Unibanco.

Diversification Opportunities for Raymond James and Itau Unibanco

-0.17

Correlation Coefficient

Raymond James  Itau Unibanco

Good diversification

The 3 months correlation between Raymond and Itau is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Raymond James Financial and Itau Unibanco Banco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itau Unibanco Banco 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 Itau Unibanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itau Unibanco Banco has no effect on the direction of Raymond James i.e., Raymond James and Itau Unibanco go up and down completely randomly.

Pair Corralation between Raymond James and Itau Unibanco

Considering the 90-day investment horizon Raymond James Financial is expected to generate 0.82 times more return on investment than Itau Unibanco. However, Raymond James Financial is 1.22 times less risky than Itau Unibanco. It trades about 0.18 of its potential returns per unit of risk. Itau Unibanco Banco is currently generating about 0.04 per unit of risk. If you would invest  14,167  in Raymond James Financial on May 5, 2025 and sell it today you would earn a total of  2,136  from holding Raymond James Financial or generate 15.08% return on investment over 90 days.

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

Raymond James Financial  vs.  Itau Unibanco Banco

Raymond James Financial

Risk-Adjusted Performance

Good

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

Itau Unibanco Banco

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Itau Unibanco Banco are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Itau Unibanco is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Raymond James and Itau Unibanco

The main advantage of trading using opposite Raymond James and Itau Unibanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raymond James position performs unexpectedly, Itau Unibanco 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 Itau Unibanco will offset losses from the drop in Itau Unibanco's long position.

The idea behind Raymond James Financial and Itau Unibanco Banco 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.