Correlation Between Jefferies Financial and Riot Blockchain
Can any of the company-specific risk be diversified away by investing in both Jefferies Financial and Riot Blockchain 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 Riot Blockchain 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 Riot Blockchain, you can compare the effects of market volatilities on Jefferies Financial and Riot Blockchain 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 Riot Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and Riot Blockchain.
Diversification Opportunities for Jefferies Financial and Riot Blockchain
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jefferies and Riot is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies Financial Group and Riot Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riot Blockchain 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 Riot Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riot Blockchain has no effect on the direction of Jefferies Financial i.e., Jefferies Financial and Riot Blockchain go up and down completely randomly.
Pair Corralation between Jefferies Financial and Riot Blockchain
Considering the 90-day investment horizon Jefferies Financial Group is expected to under-perform the Riot Blockchain. But the stock apears to be less risky and, when comparing its historical volatility, Jefferies Financial Group is 1.9 times less risky than Riot Blockchain. The stock trades about -0.02 of its potential returns per unit of risk. The Riot Blockchain is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,167 in Riot Blockchain on October 25, 2024 and sell it today you would earn a total of 217.00 from holding Riot Blockchain or generate 18.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jefferies Financial Group vs. Riot Blockchain
Performance |
| Timeline |
| Jefferies Financial |
| Riot Blockchain |
Jefferies Financial and Riot Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jefferies Financial and Riot Blockchain
The main advantage of trading using opposite Jefferies Financial and Riot Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jefferies Financial position performs unexpectedly, Riot Blockchain 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 Riot Blockchain will offset losses from the drop in Riot Blockchain's long position.| Jefferies Financial vs. Lazard | Jefferies Financial vs. PJT Partners | Jefferies Financial vs. Moelis Co | Jefferies Financial vs. Houlihan Lokey |
| Riot Blockchain vs. Hut 8 Corp | Riot Blockchain vs. CleanSpark | Riot Blockchain vs. Bit Digital | Riot Blockchain vs. Bitfarms |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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