Correlation Between Iron Mountain and Jefferies Financial
Can any of the company-specific risk be diversified away by investing in both Iron Mountain and Jefferies 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 Iron Mountain and Jefferies Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iron Mountain Incorporated and Jefferies Financial Group, you can compare the effects of market volatilities on Iron Mountain and Jefferies 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 Iron Mountain with a short position of Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and Jefferies Financial.
Diversification Opportunities for Iron Mountain and Jefferies Financial
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Iron and Jefferies is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial and Iron Mountain 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 Iron Mountain Incorporated are associated (or correlated) with Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Iron Mountain i.e., Iron Mountain and Jefferies Financial go up and down completely randomly.
Pair Corralation between Iron Mountain and Jefferies Financial
Assuming the 90 days trading horizon Iron Mountain Incorporated is expected to under-perform the Jefferies Financial. But the stock apears to be less risky and, when comparing its historical volatility, Iron Mountain Incorporated is 1.48 times less risky than Jefferies Financial. The stock trades about -0.17 of its potential returns per unit of risk. The Jefferies Financial Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 42,475 in Jefferies Financial Group on October 17, 2024 and sell it today you would earn a total of 1,041 from holding Jefferies Financial Group or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.3% |
| Values | Daily Returns |
Iron Mountain Incorporated vs. Jefferies Financial Group
Performance |
| Timeline |
| Iron Mountain |
| Jefferies Financial |
Iron Mountain and Jefferies Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iron Mountain and Jefferies Financial
The main advantage of trading using opposite Iron Mountain and Jefferies Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Mountain position performs unexpectedly, Jefferies 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 Jefferies Financial will offset losses from the drop in Jefferies Financial's long position.| Iron Mountain vs. Applied Materials, | Iron Mountain vs. Fair Isaac | Iron Mountain vs. Westinghouse Air Brake | Iron Mountain vs. Cardinal Health, |
| Jefferies Financial vs. Iron Mountain Incorporated | Jefferies Financial vs. Verizon Communications | Jefferies Financial vs. United States Steel | Jefferies Financial vs. Marvell Technology |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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