Correlation Between Houlihan Lokey and Stifel Financial
Can any of the company-specific risk be diversified away by investing in both Houlihan Lokey 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 Houlihan Lokey and Stifel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Houlihan Lokey and Stifel Financial, you can compare the effects of market volatilities on Houlihan Lokey 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 Houlihan Lokey with a short position of Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Houlihan Lokey and Stifel Financial.
Diversification Opportunities for Houlihan Lokey and Stifel Financial
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Houlihan and Stifel is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Houlihan Lokey and Stifel Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel Financial and Houlihan Lokey 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 Houlihan Lokey 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 Houlihan Lokey i.e., Houlihan Lokey and Stifel Financial go up and down completely randomly.
Pair Corralation between Houlihan Lokey and Stifel Financial
Considering the 90-day investment horizon Houlihan Lokey is expected to generate 1.18 times less return on investment than Stifel Financial. But when comparing it to its historical volatility, Houlihan Lokey is 1.19 times less risky than Stifel Financial. It trades about 0.23 of its potential returns per unit of risk. Stifel Financial is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 9,366 in Stifel Financial on August 28, 2024 and sell it today you would earn a total of 2,302 from holding Stifel Financial or generate 24.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Houlihan Lokey vs. Stifel Financial
Performance |
| Timeline |
| Houlihan Lokey |
| Stifel Financial |
Houlihan Lokey and Stifel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Houlihan Lokey and Stifel Financial
The main advantage of trading using opposite Houlihan Lokey and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Houlihan Lokey 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.| Houlihan Lokey vs. Visa Class A | Houlihan Lokey vs. Diamond Hill Investment | Houlihan Lokey vs. Distoken Acquisition | Houlihan Lokey vs. AllianceBernstein Holding LP |
| Stifel Financial vs. Visa Class A | Stifel Financial vs. Diamond Hill Investment | Stifel Financial vs. Distoken Acquisition | Stifel Financial vs. AllianceBernstein Holding LP |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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