Correlation Between Stifel Financial and Associated Capital
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Associated Capital 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 Stifel Financial and Associated Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and Associated Capital Group, you can compare the effects of market volatilities on Stifel Financial and Associated Capital 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 Stifel Financial with a short position of Associated Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Associated Capital.
Diversification Opportunities for Stifel Financial and Associated Capital
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stifel and Associated is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Associated Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Capital and Stifel Financial 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 Stifel Financial are associated (or correlated) with Associated Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Capital has no effect on the direction of Stifel Financial i.e., Stifel Financial and Associated Capital go up and down completely randomly.
Pair Corralation between Stifel Financial and Associated Capital
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 0.99 times more return on investment than Associated Capital. However, Stifel Financial is 1.01 times less risky than Associated Capital. It trades about 0.16 of its potential returns per unit of risk. Associated Capital Group is currently generating about 0.06 per unit of risk. If you would invest 7,525 in Stifel Financial on February 19, 2024 and sell it today you would earn a total of 768.00 from holding Stifel Financial or generate 10.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Stifel Financial vs. Associated Capital Group
Performance |
Timeline |
Stifel Financial |
Associated Capital |
Stifel Financial and Associated Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stifel Financial and Associated Capital
The main advantage of trading using opposite Stifel Financial and Associated Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, Associated Capital 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 Associated Capital will offset losses from the drop in Associated Capital's long position.The idea behind Stifel Financial and Associated Capital Group 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.Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. AssetMark Financial Holdings | Associated Capital vs. Blackrock Muni Intermediate |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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