Correlation Between Jefferies Financial and Spotify Technology
Can any of the company-specific risk be diversified away by investing in both Jefferies Financial and Spotify Technology 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 Jefferies Financial and Spotify Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jefferies Financial Group and Spotify Technology SA, you can compare the effects of market volatilities on Jefferies Financial and Spotify Technology 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 Jefferies Financial with a short position of Spotify Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and Spotify Technology.
Diversification Opportunities for Jefferies Financial and Spotify Technology
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jefferies and Spotify is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies Financial Group and Spotify Technology SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spotify Technology and Jefferies Financial 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 Jefferies Financial Group are associated (or correlated) with Spotify Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spotify Technology has no effect on the direction of Jefferies Financial i.e., Jefferies Financial and Spotify Technology go up and down completely randomly.
Pair Corralation between Jefferies Financial and Spotify Technology
Assuming the 90 days trading horizon Jefferies Financial Group is expected to under-perform the Spotify Technology. In addition to that, Jefferies Financial is 1.41 times more volatile than Spotify Technology SA. It trades about -0.22 of its total potential returns per unit of risk. Spotify Technology SA is currently generating about -0.02 per unit of volatility. If you would invest 71,478 in Spotify Technology SA on October 14, 2024 and sell it today you would lose (821.00) from holding Spotify Technology SA or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jefferies Financial Group vs. Spotify Technology SA
Performance |
| Timeline |
| Jefferies Financial |
| Spotify Technology |
Jefferies Financial and Spotify Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jefferies Financial and Spotify Technology
The main advantage of trading using opposite Jefferies Financial and Spotify Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jefferies Financial position performs unexpectedly, Spotify Technology 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 Spotify Technology will offset losses from the drop in Spotify Technology's long position.| Jefferies Financial vs. METISA Metalrgica Timboense | Jefferies Financial vs. Check Point Software | Jefferies Financial vs. MAHLE Metal Leve | Jefferies Financial vs. Align Technology |
| Spotify Technology vs. Bank of America | Spotify Technology vs. Jefferies Financial Group | Spotify Technology vs. Ameriprise Financial | Spotify Technology vs. Deutsche Bank Aktiengesellschaft |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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