Correlation Between Heritage Global and Stifel Financial
Can any of the company-specific risk be diversified away by investing in both Heritage Global 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 Heritage Global and Stifel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heritage Global and Stifel Financial, you can compare the effects of market volatilities on Heritage Global 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 Heritage Global with a short position of Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heritage Global and Stifel Financial.
Diversification Opportunities for Heritage Global and Stifel Financial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Heritage and Stifel is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Heritage Global and Stifel Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel Financial and Heritage Global 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 Heritage Global 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 Heritage Global i.e., Heritage Global and Stifel Financial go up and down completely randomly.
Pair Corralation between Heritage Global and Stifel Financial
Given the investment horizon of 90 days Heritage Global is expected to under-perform the Stifel Financial. In addition to that, Heritage Global is 1.71 times more volatile than Stifel Financial. It trades about -0.01 of its total potential returns per unit of risk. Stifel Financial is currently generating about 0.09 per unit of volatility. If you would invest 5,921 in Stifel Financial on August 26, 2024 and sell it today you would earn a total of 5,701 from holding Stifel Financial or generate 96.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heritage Global vs. Stifel Financial
Performance |
| Timeline |
| Heritage Global |
| Stifel Financial |
Heritage Global and Stifel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heritage Global and Stifel Financial
The main advantage of trading using opposite Heritage Global and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heritage Global 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.| Heritage Global vs. Scully Royalty | Heritage Global vs. Mercurity Fintech Holding | Heritage Global vs. Donnelley Financial Solutions | Heritage Global vs. Oppenheimer Holdings |
| Stifel Financial vs. Raymond James Financial | Stifel Financial vs. Evercore Partners | Stifel Financial vs. Selective Insurance Group | Stifel Financial vs. Reinsurance Group of |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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