Correlation Between Applied Blockchain and Stifel Financial
Can any of the company-specific risk be diversified away by investing in both Applied Blockchain and Stifel 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 Applied Blockchain and Stifel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Blockchain and Stifel Financial, you can compare the effects of market volatilities on Applied Blockchain and Stifel 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 Applied Blockchain with a short position of Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Blockchain and Stifel Financial.
Diversification Opportunities for Applied Blockchain and Stifel Financial
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Applied and Stifel is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Applied Blockchain and Stifel Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel 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 Stifel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stifel Financial has no effect on the direction of Applied Blockchain i.e., Applied Blockchain and Stifel Financial go up and down completely randomly.
Pair Corralation between Applied Blockchain and Stifel Financial
Given the investment horizon of 90 days Applied Blockchain is expected to generate 5.29 times more return on investment than Stifel Financial. However, Applied Blockchain is 5.29 times more volatile than Stifel Financial. It trades about 0.06 of its potential returns per unit of risk. Stifel Financial is currently generating about 0.16 per unit of risk. If you would invest 658.00 in Applied Blockchain on September 3, 2024 and sell it today you would earn a total of 352.00 from holding Applied Blockchain or generate 53.5% 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. Stifel Financial
Performance |
| Timeline |
| Applied Blockchain |
| Stifel Financial |
Applied Blockchain and Stifel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Blockchain and Stifel Financial
The main advantage of trading using opposite Applied Blockchain and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Blockchain position performs unexpectedly, Stifel 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 Stifel Financial will offset losses from the drop in Stifel Financial's long position.| Applied Blockchain vs. Magic Empire Global | Applied Blockchain vs. Zhong Yang Financial | Applied Blockchain vs. Netcapital | Applied Blockchain vs. Lazard |
| Stifel Financial vs. Riot Blockchain | Stifel Financial vs. Marathon Digital Holdings | Stifel Financial vs. Applied Blockchain | Stifel Financial vs. Hut 8 Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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