Correlation Between Jefferies Financial and Greenhill
Can any of the company-specific risk be diversified away by investing in both Jefferies Financial and Greenhill 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 Greenhill 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 Greenhill Co, you can compare the effects of market volatilities on Jefferies Financial and Greenhill 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 Greenhill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and Greenhill.
Diversification Opportunities for Jefferies Financial and Greenhill
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jefferies and Greenhill is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies Financial Group and Greenhill Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenhill 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 Greenhill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenhill has no effect on the direction of Jefferies Financial i.e., Jefferies Financial and Greenhill go up and down completely randomly.
Pair Corralation between Jefferies Financial and Greenhill
If you would invest 6,372 in Jefferies Financial Group on August 26, 2024 and sell it today you would earn a total of 1,486 from holding Jefferies Financial Group or generate 23.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Jefferies Financial Group vs. Greenhill Co
Performance |
| Timeline |
| Jefferies Financial |
| Greenhill |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jefferies Financial and Greenhill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jefferies Financial and Greenhill
The main advantage of trading using opposite Jefferies Financial and Greenhill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jefferies Financial position performs unexpectedly, Greenhill 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 Greenhill will offset losses from the drop in Greenhill's long position.| Jefferies Financial vs. Lazard | Jefferies Financial vs. PJT Partners | Jefferies Financial vs. Moelis Co | Jefferies Financial vs. Houlihan Lokey |
| Greenhill vs. Magic Empire Global | Greenhill vs. Applied Blockchain | Greenhill vs. Zhong Yang Financial | Greenhill vs. Netcapital |
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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