Correlation Between Goldman Sachs and Stifel Financial
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and Stifel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Group and Stifel Financial Corp, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Stifel Financial.
Diversification Opportunities for Goldman Sachs and Stifel Financial
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldman and Stifel is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs i.e., Goldman Sachs and Stifel Financial go up and down completely randomly.
Pair Corralation between Goldman Sachs and Stifel Financial
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 1.3 times more return on investment than Stifel Financial. However, Goldman Sachs is 1.3 times more volatile than Stifel Financial Corp. It trades about 0.08 of its potential returns per unit of risk. Stifel Financial Corp is currently generating about 0.03 per unit of risk. If you would invest 34,514 in Goldman Sachs Group on August 27, 2024 and sell it today you would earn a total of 25,764 from holding Goldman Sachs Group or generate 74.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. Stifel Financial Corp
Performance |
| Timeline |
| Goldman Sachs Group |
| Stifel Financial Corp |
Goldman Sachs and Stifel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Stifel Financial
The main advantage of trading using opposite Goldman Sachs and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
| Stifel Financial vs. Raymond James Financial | Stifel Financial vs. The Charles Schwab | Stifel Financial vs. Jefferies Financial Group | Stifel Financial vs. Oppenheimer Holdings |
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.
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