Correlation Between Jefferies Financial and Stifel Financial
Can any of the company-specific risk be diversified away by investing in both Jefferies Financial and Stifel 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 Jefferies Financial and Stifel Financial 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 Stifel Financial Corp, you can compare the effects of market volatilities on Jefferies Financial and Stifel 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 Jefferies Financial with a short position of Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and Stifel Financial.
Diversification Opportunities for Jefferies Financial and Stifel Financial
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jefferies and Stifel is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies Financial Group and Stifel Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel Financial Corp 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 Stifel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stifel Financial Corp has no effect on the direction of Jefferies Financial i.e., Jefferies Financial and Stifel Financial go up and down completely randomly.
Pair Corralation between Jefferies Financial and Stifel Financial
Considering the 90-day investment horizon Jefferies Financial Group is expected to generate 5.64 times more return on investment than Stifel Financial. However, Jefferies Financial is 5.64 times more volatile than Stifel Financial Corp. It trades about 0.37 of its potential returns per unit of risk. Stifel Financial Corp is currently generating about 0.04 per unit of risk. If you would invest 6,428 in Jefferies Financial Group on August 31, 2024 and sell it today you would earn a total of 1,465 from holding Jefferies Financial Group or generate 22.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jefferies Financial Group vs. Stifel Financial Corp
Performance |
| Timeline |
| Jefferies Financial |
| Stifel Financial Corp |
Jefferies Financial and Stifel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jefferies Financial and Stifel Financial
The main advantage of trading using opposite Jefferies Financial and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jefferies Financial position performs unexpectedly, Stifel 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 Stifel Financial will offset losses from the drop in Stifel Financial's long position.| Jefferies Financial vs. Lazard | Jefferies Financial vs. PJT Partners | Jefferies Financial vs. Moelis Co | Jefferies Financial vs. Houlihan Lokey |
| Stifel Financial vs. Perella Weinberg Partners | Stifel Financial vs. Oppenheimer Holdings | Stifel Financial vs. Stifel Financial Corp | Stifel Financial vs. Piper Sandler Companies |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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