Correlation Between Jefferies Financial and IDP Education
Can any of the company-specific risk be diversified away by investing in both Jefferies Financial and IDP Education 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 IDP Education 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 IDP Education Limited, you can compare the effects of market volatilities on Jefferies Financial and IDP Education 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 IDP Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and IDP Education.
Diversification Opportunities for Jefferies Financial and IDP Education
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jefferies and IDP is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies Financial Group and IDP Education Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDP Education Limited 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 IDP Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDP Education Limited has no effect on the direction of Jefferies Financial i.e., Jefferies Financial and IDP Education go up and down completely randomly.
Pair Corralation between Jefferies Financial and IDP Education
Considering the 90-day investment horizon Jefferies Financial Group is expected to generate 0.8 times more return on investment than IDP Education. However, Jefferies Financial Group is 1.26 times less risky than IDP Education. It trades about 0.06 of its potential returns per unit of risk. IDP Education Limited is currently generating about -0.13 per unit of risk. If you would invest 7,010 in Jefferies Financial Group on November 7, 2024 and sell it today you would earn a total of 463.00 from holding Jefferies Financial Group or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jefferies Financial Group vs. IDP Education Limited
Performance |
| Timeline |
| Jefferies Financial |
| IDP Education Limited |
Jefferies Financial and IDP Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jefferies Financial and IDP Education
The main advantage of trading using opposite Jefferies Financial and IDP Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jefferies Financial position performs unexpectedly, IDP Education 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 IDP Education will offset losses from the drop in IDP Education's long position.| Jefferies Financial vs. Lazard | Jefferies Financial vs. PJT Partners | Jefferies Financial vs. Moelis Co | Jefferies Financial vs. Houlihan Lokey |
| IDP Education vs. Optex Systems Holdings, | IDP Education vs. Aquagold International | IDP Education vs. Thrivent High Yield | IDP Education vs. Morningstar Unconstrained Allocation |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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