Correlation Between BGC and Stifel Financial
Can any of the company-specific risk be diversified away by investing in both BGC 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 BGC and Stifel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGC Group and Stifel Financial Corp, you can compare the effects of market volatilities on BGC 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 BGC with a short position of Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGC and Stifel Financial.
Diversification Opportunities for BGC and Stifel Financial
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BGC and Stifel is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BGC Group and Stifel Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel Financial Corp and BGC 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 BGC Group 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 Corp has no effect on the direction of BGC i.e., BGC and Stifel Financial go up and down completely randomly.
Pair Corralation between BGC and Stifel Financial
Considering the 90-day investment horizon BGC Group is expected to generate 3.09 times more return on investment than Stifel Financial. However, BGC is 3.09 times more volatile than Stifel Financial Corp. It trades about 0.02 of its potential returns per unit of risk. Stifel Financial Corp is currently generating about 0.0 per unit of risk. If you would invest 967.00 in BGC Group on August 31, 2024 and sell it today you would earn a total of 14.00 from holding BGC Group or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGC Group vs. Stifel Financial Corp
Performance |
| Timeline |
| BGC Group |
| Stifel Financial Corp |
BGC and Stifel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGC and Stifel Financial
The main advantage of trading using opposite BGC and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGC 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.The idea behind BGC Group and Stifel Financial Corp 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.| Stifel Financial vs. Q2 Holdings | Stifel Financial vs. United Airlines Holdings | Stifel Financial vs. Verra Mobility Corp | Stifel Financial vs. Proficient Auto Logistics, |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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